Paladin Energy proposes $1.25b takeover bid for Fission Uranium
Paladin Energy (ASX: PDN) has made a $1.25 billion takeover offer for Fission Uranium Corp to create a global uranium leader with assets in Canada, Namibia and Australia.
On completion of the all-scrip acquisition, the enlarged group is expected to be worth $5.27 billion and hold dual listings in Australia and Canada.
The combined resource base will represent one of the largest amongst the world’s pure-play uranium companies, with 544 million pounds of pro-forma uranium oxide and 157Mlbs in ore reserves.
Uranium projects
Patterson Lake South hosts the high-grade near-surface Triple R uranium deposit, the largest of its kind in the region.
The project is backed by a feasibility study indicating its potential to become one of the most economically robust uranium mines in the world when it commences production in 2029.
Fission also owns early-stage exploration projects at West Cluff in the western Athabasca Basin and the Larocque property to the east.
Its portfolio is expected to join Paladin’s advanced Michelin project near Labrador, which contains a total mineral resource of 92Mlb uranium (82.2Mlb measured and indicated).
The deal comes at a time when uranium prices are increasing on the back of rising demand and limited global supply.
Takeover terms
Under the terms of the takeover, Fission investors will receive 0.1076 fully-paid Paladin shares for each Fission share held.
The consideration represents an implied value of $1.43 per Fission share, a 25.8% premium to the company’s closing price on 21 June and a 30% premium to the 20-day volume-weighted average price of Fission shares.
Paladin will list its shares on the Toronto Stock Exchange, so that Fission shareholders receive TSX-listed Paladin shares.
On closure of the deal in September, Fission investors will own a 24% stake in Paladin.
Global uranium leader
Paladin chief executive officer Ian Purdy said the takeover was part of the company’s strategy to diversify and grow into a global uranium leader across top uranium mining jurisdictions.
“Fission is a natural fit for our portfolio and the addition of the shallow, high-grade Patterson Lake South project will help create a leading Canadian development hub alongside our Michelin project, with exploration upside across all properties,” he said.
“Both sets of shareholders are expected to benefit from the increased scale of the enlarged company, with a combined mineral resource representing one of the largest amongst pure-play uranium companies globally and a substantially increased international capital markets exposure.”
The transaction also de-risks the development of Patterson Lake South for Fission shareholders, as it will be underpinned by production from Langer Heinrich and Paladin’s leading offtake contract book.
Langer Heinrich restart
The Fission takeover will complement the restart of Paladin’s flagship Langer Heinrich mine in Namibia and its uranium assets in Queensland and Western Australia, which remain undeveloped due to a ban on uranium mining in those states.
Langer Heinrich is a globally significant, long-life operation which produced more than 43Mlb uranium oxide before being placed on care and maintenance in 2018 due to low uranium prices.
In March, the large open-pit mine returned to commercial production and the first customer shipment is scheduled for July. Langer Heinrich is due to reach its nameplate capacity of 6Mlbpa uranium oxide during the 2026 financial year.