Australian uranium company given go-ahead to absorb Canadian counterpart

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A major acquisition in Canada’s uranium sector is going forward after getting approval from the federal government.

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Paladin Energy Ltd., which is headquartered in Perth, Australia, has been given the green light to take over Kelowna, B.C.-based Fission Uranium Corp., which has been developing its Patterson Lake South Project (PLS) in northern Saskatchewan’s Athabasca basin. The mine there is set to begin production in 2029.

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The acquisition of Fission Uranium was valued at $1.14 billion when first announced this past summer and the combined entity now has a market cap of about three billion Australian dollars.

“We’re really pleased and quite excited to have completed all of the processes,” Paladin Energy chief executive Ian Purdy said.

With the closing of the deal, Paladin Energy shares are now being traded on the Toronto Stock Exchange. Purdy said the new entity is one of the world’s largest independent uranium producers and has a lot of growth potential.

“We’re now really excited to have one of the best undeveloped projects in the world in Athabasca as part of our portfolio,” he said.

Paladin Energy’s acquisition of Fission Uranium was subject to review under the Investment Canada Act due to concerns about national security since uranium is considered a critical mineral by the federal government.

The Ministry of Science and Economic Development, which is responsible for enforcing the legislation, said the deal was reviewed by Canadian security and intelligence agencies, which found it would not be harmful to national security.

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The ministry said Paladin Energy made submissions to assuage potential government concerns.

“The undertakings submitted by Paladin include board independence measures, assurances for compliance with nuclear safety and non-proliferation laws, limits on sources of funding and prohibitions on sale to customers in the People’s Republic of China,” it said.

The ministry said it is committed to securing the country’s supply of uranium for Canada and its allies, but that confidentiality provisions prevented it from making further comments about the process.

Purdy said his company understands that critical minerals and their ownership are important issues for governments. He also commended the federal government for its review, which took six months to complete.

The Government of Saskatchewan said it is looking forward to working with Paladin Energy to develop the PSL project.

“The Patterson Lake South project has the potential to be another major source of fuel for zero-emissions nuclear power, strengthening energy security for Canada and its trading partners,” it said in an email.

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Purdy said Paladin Energy has customers lined up in the United States and Europe to buy uranium from the PLS project as well as potential customers in Japan. He added the company has an extensive contract book, which includes some of the world’s largest nuclear utilities, that has been built up from selling uranium from its mine in Namibia.

“We look forward to bringing PLS through the development phase and delivering uranium around the world to our customers both in North America and Europe and other parts of the world,” he said.

With the acquisition formalized, Purdy said Paladin Energy will be devoting all its energy and resources to get the PLS project going. He said this means the company will be working with Fission Uranium’s team to undertake a comprehensive review of the project to see what has been done and what needs to be done to complete the project, which includes getting final environmental approval.

He also said Fission’s entire Saskatchewan team will remain in place.

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Purdy said Saskatchewan and Canada are attractive places to do business because the Athabasca basin is considered by many to be the world’s premier uranium mining region due to the quality of its uranium ore and the local industry already being established. He said the region, along with Canada, is an important one for the company.

“We see it as our No. 1 growth priority,” he said.

mhansen@postmedia.com

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