China’s CGN Mining Company Limited has acquired almost 20% of Canadian uranium developer Fission Uranium Corp in a deal worth more than C$82.2 million. It marks the first time a Chinese company has directly invested in a Canadian uranium company.
The agreement will see Fission and CGN proceeding towards a private placement in which CGN would make a strategic investment which will result in it owning more than 96.736 million common shares of Fission plus an additional number of common shares equal to 19.99% of the number of common shares issued by Fission.
Fission and CGN have also agreed to proceed towards entering into an offtake agreement pursuant to which CGN will agree to purchase uranium production from the company’s PLS property.
Fission is developing the Triple R uranium deposit at Patterson Lake South (PLS) in northern Saskatchewan, Canada. It and Denison Mines Corp called off a C$483 million merger agreement in October due to opposition from Fission’s shareholders.
Fission Uranium chairman and CEO Dev Randhawa said, “This is an historic moment for Canada's uranium industry. It is the first time a Chinese company has invested directly in a Canadian uranium company. We are thrilled that CGN Mining has chosen to invest in Fission, PLS and the Triple R deposit.
"CGN Mining’s understanding of the uranium business is superb and we are excited at the opportunity to work with them. CGN Mining’s knowledge and expertise will be invaluable as we progress PLS and add to shareholder value.”
CGN Mining’s chief financial officer Xing Jianhua said, “CGN Mining and Fission Uranium have worked hard together to forge this partnership. Both companies have a strong drive to cooperate and achieve the synergy which will result in sustained, mutual benefit.”
CGN Mining Company is an investment holding company listed on Hong Kong Stock Exchange and mainly engaged in the trading of natural uranium. In order to become a resource development and energy services company with a focused business with clear development direction, and assets with high sustainability, CGN
Mining acquired Beijing Sino-Kazakh Uranium in 2014.
The controlling shareholder of CGN Mining is China Uranium Development Company Limited, a fully-owned subsidiary of China General Nuclear Power Corporation, which is a leading global clean energy corporation in China.
Analysts believe the deal may lead to more Chinese investment in Canadian uranium developers such as Denison Mines Corp and Nexgen Energy. Canada is the world’s second biggest uranium-producing country after Kazakhstan.