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Uranium Energy wins bidding war with Denison Mines for UEX

By on August 22, 2022 0

Clues to how the Russian invasion of Ukraine fueled demand for energy sources in politically stable regions

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Texas-based Uranium Energy Corp. has won a bidding war over Saskatchewan uranium assets, suggesting the Russian invasion of Ukraine has fueled demand for energy sources in politically stable regions.

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Uranium Energy’s bid to acquire Saskatoon-based UEX Corp. was twice rejected by Toronto-based Denison Mines Corp., which came in with higher bids. The U.S. company said Aug. 22 that it had finally prevailed, revealing that the British Columbia Supreme Court had approved its acquisition of UEX on Aug. 18 after the company’s shareholders voted in favor of the takeover. control on August 15.

“This (agreement) marks UEC’s second successful highly accretive merger and acquisition transaction in the past year, creating North America’s largest diversified uranium-focused company,” the CEO said. ‘Uranium Energy, Amir Adani, in a press release.

“The competitive interest in UEX from other industry participants further validates the significant advantage and strategic rationale we have identified in UEX’s portfolio of high-quality projects in the world-class Athabasca Basin. in Saskatchewan,” added Adani.

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Uranium prices have fallen 24% from their April 2022 highs, but are still nearly 50% higher than a year ago, according to Fundamental Research Corp. The company described the uranium supply chain as “very vulnerable”, given that Russia accounts for 35% of the world’s enriched uranium production. This suggests abundant demand for uranium from Western democracies, as the United States and its allies seem determined to punish Russia for its unprovoked invasion of Ukraine with economic sanctions.

Uranium producers such as Cameco Corp. have witnessed an increasing demand for this product over the past year. Cameco CEO Timothy Gitzel told analysts on a call in late July that countries struggling to access renewables were gradually turning to nuclear for power.

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Uranium Energy eventually secured UEX with an all-stock deal that valued each UEX share at 0.090 per Uranium Energy share, which was approximately 49.7 cents per UEX share based on the closing price on the Toronto Stock Exchange on the 12 august.

Corpus Christi-based Uranium Energy first tried to buy UEX in June. Denison Mines placed an undisclosed bid on July 29, which UEX Corp. said was a superior bid. Uranium Energy responded with a better deal on August 8. This attempt was again overshadowed by Denison, which sought to own 100% of its flagship Wheeler River project as part of the deal.

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UEX’s assets are all located in the Athabasca Basin and include a 49.1% interest in the Shea Creek project, which is expected to contain approximately 67.6 million pounds of uranium, and an 82. 8% in the Christie Lake project, which contains approximately 20.4 million pounds of uranium.

Some of its more advanced projects include the Kiggavik and Millennium mines, in which the company holds a 16.9% and 15% interest respectively. Both of these projects are in the feasibility stage, the final phase before a project aims to begin construction.

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