Uranium exploration and development company IsoEnergy has agreed to take full ownership of Consolidated Uranium in an all-stock deal that would value the combined company at nearly C$903.5m ($669.6m).
Both firms are presently listed on the TSX Venture Exchange in Canada.
According to the terms of the share-for-share merger, Consolidated Uranium’s shareholders will exchange each of their shares in the company for 0.5 of IsoEnergy’s common share.
Following the closing of the transaction, shareholders of IsoEnergy and Consolidated Uranium will hold about 70.5% and 29.5% of the combined company, respectively, on a fully diluted in the-money basis.
Through the merger, the companies aim to create a globally diversified uranium company with near-term production, development, and exploration projects in top-tier jurisdictions.
The combined company will be driven by high-grade indicated uranium resource located in Canada’s Athabasca Basin and fully-permitted, conventional uranium mines in the US, which are poised for a quick restart.
IsoEnergy president and CEO Tim Gabruch said: “This Merger provides our existing shareholders and new investors with an even greater opportunity to participate in the tremendous upside potential of our asset portfolio at a time when sentiment and support around the nuclear sector and the uranium industry in particular are increasingly positive.”
The enlarged company will get the backing of corporate and institutional investors such as Energy Fuels, Mega Uranium, NexGen Energy, and uranium exchange-traded funds (ETFs).
Established in early 2020, Consolidated Uranium is currently developing a portfolio of permitted, past-producing conventional uranium and vanadium mines in the US states of Utah and Colorado.
The company has a toll milling arrangement in place with US-based uranium mining company Energy Fuels.
Consolidated Uranium chairman and CEO Philip Williams said: “The asset portfolios and culture of our two companies are complementary and, together, provides our respective shareholders with exposure to a larger company that consists of a proven leadership team, a strong pipeline of development and exploration growth prospects as well as an enhanced position within capital markets.”
The transaction will be executed by a court-approved plan of arrangement pursuant to the Business Corporations Act (Ontario). This will be subject to Ontario Superior Court of Justice (Commercial List) approval and other approvals, including that of shareholders of both firms.
