Denison (TSX: DML) announced on Tuesday that it has delivered an offer to Overseas Uranium Resources Development to acquire a 100% interest in its subsidiary JCU (Canada) Exploration Company for $40.5 million in cash, more than tripling the $12.5 million accepted offer in place with UEX Corp. (TSX: UEX) announced the week before last.
JCU’s assets include 10% ownership in Denison's flagship Wheeler River project (which DML owns the remaining 90%) in the southeast part of Saskatchewan’s Athabasca Basin.
The project has probable resources of 109.4 million lb. of uranium dioxide.
"At first glance, Denison's bid to acquire the remaining 10% of its Wheeler River project would be modestly accretive (+2%), although this does depend on the final scale of future liabilities," said BMO Capital Markets in a note.
"Further, if successful, the transaction simplifies the ownership of its flagship project as the company continues to make headway de-risking the use of ISL mining in the Athabasca."
"Denison continues to be rated a top-pick in the uranium space largely underpinned by our thesis that recent de-risking work at Wheeler River regarding the ISR mining approach to the ultra-high-grade Phoenix deposit is going under-appreciated by the market," Haywood Capital Markets said in a note.
"We expect ongoing and future work to further demonstrate the viability of this low-cost mining approach and believe that will translate into more positive movement in DML’s share price."
Midday Tuesday, Denison’s stock was down 4% on the TSX. The company has a $1.1 billion market capitalization.
JCU holds a portfolio of uranium project joint venture interests in Canada, including a 10% interest in Denison's 90% owned Wheeler River uranium project.
The Denison offer includes the following features:
This story originally appeared on MINING.COM.