UEX acquiring JCU Canada for $12.5-million
Drill testing on the K-North trend south of the Gryphon deposit at the Wheeler River Project in the Athabasca Basin of northern Saskatchewan. Photo courtesy Denison Mines Corp.
UEX Corp. [UEX-TSX] has signed a definitive purchase agreement with Overseas Uranium Resources Development Co. Ltd. (OURD) to acquire 100% ownership of OURD’s wholly owned subsidiary, JCU Canada Exploration Company Ltd. (JCU).
JCU has a long history in the Canadian uranium exploration and development sector dating back to 2000, when it acquired a portfolio of Canadian uranium exploration and development assets from PNC Exploration Canada Co. Ltd., a wholly owned subsidiary of Power Reactor and Nuclear Fuel Development Corp. (PNC).
JCU’s key exploration projects cover an area of 139,346 hectares and include a 10% ownership position in the Wheeler River Project (Denison Mines Corp. – 90%), a 30.099% ownership stake in Cameco Corp.’s Millennium Project (Cameco – 69.901%), a 33.8123% ownership in the Kiggavik project (Orano Canada Inc. – 66.1877%) and a 34.4508% interest in UEX’s Christie Lake project. JCU also owns a minority equity stake in eight other grassroots and mid-stage exploration projects within the Athabasca basin.
The combination of UEX and JCU will create a compelling mid-size uranium development company with exposure to near-term uranium production with a solid pipeline of advanced resource and mid-stage exploration projects.
By acquiring JCU’s mineral property portfolio, comprising an indicated historic resource of approximately 79 million (M) pounds (lb) of triuranium octoxide (U3O8) and an inferred historic resource of approximately 18 M lb of U3O8, the combined companies will make UEX the second-largest junior uranium resource owner in Canada.
Through this transaction, UEX will acquire 100% of the shares of JCU from OURD by making cash payments of up to $12.5-million and assuming JCU’s existing liabilities. UEX’s cash payments will consist of $10-million on closing and up to $2.5-million which is expected to be paid within 45 days of the closing date, subject to adjustment based upon JCU’s actual working capital on the closing date. It is anticipated that JCU will have cash in its treasury after closing which will be retained by JCU under UEX’s management.
Both UEX and OURD’s board of directors have voted in favour of this transaction. The transaction is subject to approval of OURD shareholders at a meeting scheduled for June 18, 2021. OURD is a private Japanese company with 29 shareholders comprising some of the major companies in Japan. Closing is subject to UEX securing the necessary purchase financing and obtaining any required regulatory approvals. The transaction is expected to close on or prior to June 29, 2021.