Published: June 28, 2024 |

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Australia’s Paladin Energy has announced plans to acquire Saskatchewan-focused Fission Uranium in a transaction valued at $8.4 billion (C$1.14 billion).

“The acquisition of Fission, along with the successful restart of our Langer Heinrich Mine, is another step in our strategy to diversify and grow into a global uranium leader across the top uranium mining jurisdictions of Canada, Namibia, and Australia,” said Paladin CEO Ian Purdy in a press release.

“Fission is a natural fit for our portfolio with the shallow high-grade PLS project located in Canada’s Athabasca Basin. The addition of PLS creates a leading Canadian development hub alongside Paladin’s Michelin project, with exploration upside across all Canadian properties,” added Purdy.

Under the terms of the agreement, Paladin will acquire 100 percent of the issued and outstanding shares of Fission, while Fission shareholders will receive 0.1076 fully paid shares of Paladin for each Fission share that they hold.

This exchange represents an implied value of $.75 (C$1.30) per Fission share, a 25.8 percent premium to Fission’s closing price on June 21, and a 30 percent premium to the company’s 20 day volume-weighted average price.

Once the transaction is complete, Fission shareholders will own approximately 24 percent of the combined entity, while Paladin shareholders will account for the remaining 76 percent.

“The combination of Fission and Paladin will create a world class diverse uranium producer, adding a class leading development project in a tier 1 jurisdiction with the ability to expand production. With commercial production at Langer Heinrich and further development milestones at PLS, this opportunity will create a diverse pureplay uranium company with current production and a deep pipeline of near and mid-term assets,” said Fission President and CEO Ross McElroy.

URANIUM MARKETING GAINING STEAM AS SUPPLY TIGHTENS

The uranium market faced a prolonged downturn after the Fukushima nuclear disaster in 2011, but prices for the energy fuel have risen substantially since mid-2023, driven by tightening supply and growing demand.

An upward trend that began in 2021 gained significant momentum in 2023. By January of this year, the uranium spot price had surged past the US$100 per pound mark for the first time in 17 years, influenced by global events such as the Russia-Ukraine war and the growing realization that it will take miners time to bring supply online.

At the same time, the World Nuclear Association’s latest nuclear fuel report indicates that uranium demand could grow by 28 percent from 2023 to 2030, which corresponds to an 18 percent rise in reactor capacity.

Although prices have pulled back since the highs seen earlier this year, there are strong indicators that the uranium market could see further growth in the coming years. Various experts have pointed out that utilities are a good bellwether for uranium demand and prices, and many U.S. buyers still have contracting to do.

“The real pricing structure is being determined in the term market, and increasingly it’s going to be reflected in the term market in the five year product, the 10 year product, the 15 year product and the 20 year product. This is going to have really profound and positive implications for those few uranium juniors that have developable projects,” Rick Rule, proprietor at Rule Investment Media, recently told the Investing News Network.

Source: Investing News Network

Paladin Energy is an uranium company with head offices located in Perth, Western Australia. They hold a 75 percent interest in the globally significant Langer Heinrich Mine (LHM) in Namibia. Its long-life operations have already produced more than 43 million pounds of U3O8 to date. Paladin’s flagship mine is currently on a strong return to production trajectory, with first volumes drummed in March 2024.

Paladin also holds a diversified, high-quality, global exploration and development uranium portfolio in the premier mining jurisdictions of Canada and Australia.

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