What happened
Shares of Canadian uranium exploration, development, and production company Denison Mines (DNN -0.49%) jumped double digits today after the company made an offer to buy JCU Exploration. Denison shares closed today's session 11% higher.
So what
Yesterday, Denison made an offer to Overseas Uranium Resources Development (OURD) to acquire 100% ownership of JCU, a subsidiary of OURD. In a statement, Denison management said "Denison welcomes the opportunity to build on its long history of partnership with OURD and JCU to effect the acquisition of JCU, as presented in the Denison Offer, and bring significant additional benefit to the shareholders of OURD." But there's a complication, too.
Wheeler River uranium project. Image source: Denison Mines.
Now what
In late April, Canadian uranium and cobalt exploration and development company UEX also offered to acquire JCU, and it says that its deal is binding after it was approved by the OURD board of directors. UEX added in a statement, "The UEX Agreement with OURD is binding and enforceable and it is not open to OURD to consider any competing proposals."
Denison's flagship project is the Wheeler River uranium project in northern Saskatchewan, Canada. The project is 90% owned by Denison, with the remaining 10% belonging to JCU. Denison is offering to buy JCU with cash on hand for up to CAD$40.5 million, as well as the assumption of debt.
Denison said its offer is binding subject to "the termination of OURD's existing definitive purchase agreement with UEX Corporation in accordance with its terms." Shareholders today seem to think that Denison will be able to get the mining deal done.
