Denison Mines Corp. (DNN: Quote,DML.TO: Quote) announced that it has signed a Binding Letter of Intent by which Denison will acquire a portfolio of uranium exploration projects from Fission Energy Corp. (FSSIF.PK,FIS.V: Quote) including Fission’s 60% interest in the Waterbury Lake uranium project, as well as Fission’s exploration interests in all other properties in the eastern part of the Athabasca Basin, its interests in two joint ventures in Namibia plus its assets in Quebec and Nunavut.
As per the terms of the Binding LOI, Denison has agreed to offer shareholders of Fission 0.355 shares of Denison for each share of Fission held, conditional upon, among other things, certain assets of Fission being spun out to a new company to be held pro rata by current Fission shareholders.
The new company assets will include, among others, a 50% interest in the Patterson Lake South or “PLS” property located in the western Athabasca Basin. The Transaction values the Assets at approximately $70 million based on the closing price of Denison as of January 15, 2013. Upon completion of the Transaction, shareholders of Fission will own approximately 11% of Denison.
The board of directors of Fission has approved the Transaction and recommended that Fission shareholders vote in favour of the Transaction. Fission’s board has received a verbal opinion from Dundee Capital markets that the consideration pursuant to the Transaction is fair, from a financial point of view, to Fission shareholders.
The Binding LOI contained customary deal support provisions, including a reciprocal break fee of $3.5 million, payable if the proposed Transaction is not completed in certain circumstances. In addition, the Binding LOI included customary non-solicitation covenants by Fission together with customary exemptions to permit Fission’s board of directors to exercise its fiduciary duties and a right in favour of Denison to match any superior proposal that may arise.
The proposed transaction is expected to be completed in April 2013 or such later date as the parties may agree.
To receive FREE breaking news email alerts for Denison Mines Corp. and others in your portfolio
by RTT Staff Writer
For comments and feedback: editorial@rttnews.comBusiness News