UEX determined that the offer made by Denison Mines is a ‘Superior Proposal’, after consultations with its legal and financial advisors, and will proceed with implementing Denison’s proposal
Denison makes better offer for UEX. (Credit: WikiImages from Pixabay)
Denison Mines has made an offer to acquire all of the issued and outstanding shares of Canadian uranium and cobalt producer UEX Corporation in a transaction worth more than $181m.
In June this year, US-based Uranium Energy Corporation (UEC) agreed to acquire UEX in a transaction valued at C$234m ($181m).
UEX has informed UEC that the offer made by Denison Mines has been considered as a ‘Superior Proposal’, and it intends to proceed with implementing Denison’s proposal.
The company noted that the decision of its Board of Directors follows the consultations with its legal and financial advisors.
UEC said: “Under the Arrangement Agreement, UEC has the right, for a period of five business days from receipt of UEX’s notice, to offer to amend the terms of the Arrangement Agreement.
“In the event that UEC elects not to match and if UEX terminates the Arrangement Agreement in order to enter into an agreement with Denison, then UEX is required to pay to UEC a termination fee in the amount of $8.25m.”
The non-binding proposal is due to signing a definitive arrangement and any talks related to the transaction are subject to the terms of a non-disclosure agreement (NDA).
Currently, Denison and UEX have not entered into any definitive agreement, and any such agreement would require the termination of the initial agreement with UEC.
Through the acquisition, Denison is enabled to obtain 100% ownership in UEX’s Wheeler River project, an undeveloped uranium project in Athabasca Basin, Canada.
Wheeler River hosts high-grade Phoenix and Gryphon uranium deposits and is considered the largest undeveloped uranium project in the eastern portion of the Athabasca Basin.
In addition, Denison is enabled to obtain a 100% stake in Canadian exploration company JCU, which operates a portfolio of twelve uranium project joint venture interests in Canada.
JCU’s interests include a 30.099% stake in the Millennium project, a 33.8118% in the Kiggavik project, and 34.4508% in the Christie Lake project.
Furthermore, Denison said that its technical team based in Saskatoon has in-house expertise in exploration, project development, engineering, and mining, among other plant operations.
Its in-house technical team will help extract maximum value from uranium exploration and development of assets in the Athabasca Basin region, said the company.
Denison president and CEO David Cates said: “We believe that an acquisition by Denison of UEX, and its assets in northern Saskatchewan, has the potential to benefit Denison shareholders, bolstering Denison’s position as a leading uranium development and exploration company.
“Importantly, an acquisition of UEX would allow Denison to consolidate 100% ownership in our flagship Wheeler River Project at an ideal time ahead of the anticipated final technical de-risking steps associated with the Feasibility Study in progress for the planned Phoenix In-Situ Recovery (ISR) operation.”