With renewed demand for nuclear power coupled with supply issues, uranium prices are pushing aggressively higher. In fact, last checked uranium was up to $81.45 and could see higher highs moving forward. According to Bloomberg, “Key miner Cameco Corp. lowered its production targets due to challenges at its operations in Canada, while a recent coup in Niger has disrupted shipments to European nuclear plants. There’s also been uneasiness within the industry since the outbreak of the war in Ukraine about the reliance on the enrichment facilities run by Russia’s Rosatom State Nuclear Energy Corp.” All of which is a strong catalyst for companies like ATHA Energy Corp. (CSE: SASK) (OTCQB: SASKF), Uranium Energy Corp. (NYSE: UEC), Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR), Cameco Corp. (NYSE: CCJ) (TSX: CCO), and Denison Mines Corp. (NYSE: DNN) (TSX: DML).
Look atATHA Energy Corp.(CSE: SASK) (OTCQB: SASKF),For Example
Latitude Uranium Inc. just announced it has entered into a definitive arrangement agreement with ATHA Energy Corp. (CSE: SASK) (OTCQB: SASKF) (FRA: X5U) pursuant to which ATHA will acquire all of the issued and outstanding common shares of Latitude by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario).
Under the terms of the Latitude Arrangement, Latitude shareholders (the “Latitude Shareholders”) will receive 0.2769 of a common share of ATHA (each whole share, an “ATHA Share”) for each Latitude Share held (the “Latitude Exchange Ratio”). The Latitude Exchange Ratio was determined giving consideration to recent average trading prices for each of Latitude and ATHA. Based upon ATHA’s reference price of C$1.00, the implied consideration per Latitude Share is C$0.28, representing a 68% premium to Latitude’s closing price on December 6, 2023.
ATHA has also entered into a binding scheme implementation deed (the “92E SID”) with 92 Energy Limited (ASX: 92E) (“92E”) pursuant to which ATHA will acquire all of the issued and outstanding common shares of 92E (the “92E Shares”) by way of a scheme of arrangement pursuant to Part 5.1 of the Australian Corporations Act 2001 (Cth) (the “92E Scheme”, together with the Arrangement, the “Transactions”). ATHA has also announced its intention to complete one or more financings to raise up to $14 million concurrent with the completion of the Transactions.
Assuming the completion of both the Arrangement and the 92E Scheme, but before giving effect to the Concurrent Financing (see ATHA’s press release dated December 7, 2023), the implied market value of pro forma ATHA is expected to be approximately $267 million with existing shareholders of ATHA, Latitude Uranium and 92E owning approximately 49.25%, 25.37% and 25.38% of the Company, respectively.
The Company’s board of directors will consist of up to six directors, four of whom will be selected by ATHA from the existing ATHA directors, one of whom will be selected by Latitude Uranium from the existing Latitude Uranium directors, and one of whom will be selected by 92E from the existing 92E directors.
Strategic Rationale for the Transaction:
- Largest Exploration Portfolio in Canada: The Company is expected to provide shareholders with exposure to 7.1 million acres of exploration acreage spread across Canada’s top three uranium jurisdictions, including the largest holdings in both the Athabasca Basin (Saskatchewan) and Thelon Basin (Nunavut) – two of the highest-grade uranium districts in the world.
- Historical Resources with Expansion Potential: The Company will hold two projects with significant expansion potential with historical mineral resource estimates of:
- 2.8 million tons at 0.69% U3O8 containing 43.3 million lbs of U3O8 Inferred at the Angilak Deposit in Nunavut
- 14.7 million tons at 0.03% U3O8 containing 5.2 million lbs of U3O8 Indicated and 28.3 million tons at 0.03% U3O8 containing 4.4 million lbs of U3O8 Inferred at Moran Lake3 and 5.1 million tons at 0.04% U3O8 containing 4.9 million lbs of U3O8 Inferred at Anna Lake4, both in the Central Mineral Belt (“CMB”) of Labrador
- Provides Exposure to a Recent Discovery Along a Mineralized Trend: The Gemini discovery in the Athabasca Basin is a high grade, basement hosted discovery along a mineralized trend with significant potential for additional discoveries along an underexplored corridor.
- Robust Pipeline of Exploration Catalysts: The planned 2024 exploration program is expected to include: Post-discovery corridor expansion geophysics and drilling, greenfield exploration programs and results from NexGen Energy’s summer 2023 drilling program on areas including ATHA’s 10% carried interest, which constitutes NexGen Energy’s largest exploration program since the discovery of the Arrow deposit.
- Strong Balance Sheet to Execute on Growth Initiatives: With no debt and a forecast cash balance of over $55 million5 on completion of the Transactions and Concurrent Financing, the Company’s exploration activities are expected to be fully funded well into 2025.
- Exceptional Leadership Team: The amalgamated board and management team of the Company have decades of experience, with a demonstrated track record in all facets of uranium exploration, development operations, and capital formation needed to drive growth in uranium resources and build shareholder value.
- Strengthened Capital Markets Profile: Significantly larger market capitalization of the Company is expected to improve liquidity and attract increased institutional investor interest.
John Jentz, Chief Executive Officer of Latitude Uranium, commented: “We are very excited to be part of such a transformative transaction to create an unparalleled uranium exploration company focused on Canada's three major uranium districts. The benefits for LUR shareholders are clear, an immediate increase in value combined with on-going exposure to one of the most robust portfolios of high-upside uranium assets in the entire sector. The combined company will be fully funded with $55 million4 in cash and boasts a suite of highly complementary uranium assets across the exploration spectrum. The combined company will have increased scale and prospectivity and we believe it will be a go-to name in the uranium exploration industry."
Benefits to LUR Shareholders
- Immediate premium to LUR Shareholders of 56.1% based on the closing price of the ATHA Shares on the CSE on December 6, 2023;
- Combines complimentary exploration assets to become the most complete vehicle for uranium exploration exposure in Canada;
- Entry to the Athabasca Basin with exposure to a significant pipeline of fully funded and ongoing exploration projects including the Gemini Discovery and carried interest upside on active exploration blocks held by NexGen and IsoEnergy;
- Improved access to capital and estimated resulting cash balance of over $55 million5;
- Complimentary management and technical teams with a focus on development, and exploration;
- Increased scale creates a stronger platform for future M&A, greater access to capital and expanded research coverage;
- Potential inclusion to uranium focused ETFs which will bolster liquidity and enhance capital markets profile; and
- Potential re-rating from asset diversification, as well as additional exploration upside.
Other related developments from around the markets include:
Uranium Energy Corp.’s. Amir Adnani, CEO and President stated: "Fiscal 2023 proved to be a year of significant achievements in executing on our strategy and building the premier North American focused uranium company. We continued to make accretive acquisitions and advance our projects with resource expansions and extraction/production restart programs. Our strategy is aimed at a robust uranium supply from the stable and secure jurisdictions of the U.S. and Canada, with near term U.S. ISR production and a pipeline of high-grade Canadian projects with exceptional growth potential. UEC remains 100% un-hedged, at a time when the need for new production is becoming acute in the global market and particularly for Western utilities seeking supply assurance. Our balance sheet is debt free with $192.3 million in cash and liquid assets, providing the financial strength to advance projects towards production and support further accretive acquisitions."
Energy Fuels Inc.’s Mark S. Chalmers, President and CEO, recently stated, "Energy Fuels continued to make excellent progress on all aspects of our core uranium and rare earth businesses during Q2-2023. We completed the sale of 80,000 pounds of uranium to one of our utility customers under one of our long-term contracts. We expect to make another sale of 180,000 pounds of uranium under another long-term contract later this year. Depending on inflation and spot price activity, we expect that sale to be at a price of $54 - $58 per pound. We also continued preparing four (4) of our conventional uranium mines for production, and we expect at least one to be ready to commercially produce uranium ore later this year.
Cameco Corp. provided a market update regarding challenges at the Cigar Lake mine and Key Lake mill that are expected to impact its 2023 production forecast. At the Cigar Lake mine, it now expects to produce up to 16.3 million pounds of uranium concentrate (U3O8) (100% basis) this year, a reduction from the previous forecast of 18 million pounds U3O8 (100% basis). Production from the McArthur River/Key Lake operations for 2023 is anticipated to be 14 million pounds U3O8 (100% basis), down from the previous forecast of 15 million pounds U3O8 (100% basis). As previously reported, mining activities at the Cigar Lake operation were initiated from a new zone in the orebody (west pod) in the second quarter of this year, which impacted productivity. As mining activities continued in the west pod during the third quarter, equipment reliability issues emerged which further affected performance. The mine is scheduled to enter its planned annual maintenance shutdown that will run through most of September. At the Key Lake mill, ramp up activities remain ongoing. However, as noted in our second quarter MD&A, there is continued uncertainty regarding planned production in 2023 at Key Lake due to the length of time the facility was in care and maintenance, the operational changes that were implemented, availability of personnel with the necessary skills and experience, and the impact of supply chain challenges on the availability of materials and reagents.
Denison Mines Corp.entered into a binding agreement with F3 Uranium Corp. to make a $15 million strategic investment in F3 in the form of unsecured convertible debentures David Cates, President and CEO of Denison commented, "F3's technical team has an incredible track record of exploration success including the discovery of the JR Zone on the Patterson Lake North property, which represents one of the top new uranium discoveries globally. We are pleased to be investing in F3, supporting the further assessment of the PLN property, and providing Denison shareholders with exposure to this exciting new discovery in the Athabasca Basin."
Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for ATHA Energy Corp. by ATHA Energy Corp. We own ZERO shares of ATHA Energy Corp. Please click here for disclaimer.
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