Paladin Energy’s top boss said the acquisition of Fission Uranium would make the company the third-largest publicly traded uranium producer and offer investors an alternative in a sector dominated by two giants.
Paladin would produce 10 percent of global uranium production after combining its mine in Namibia and Fission’s Canadian project, said CEO Ian Purdy.
This would put Paladin in third place in terms of production behind the largest producer Kazatomprom, which is controlled by the Kazakh government, and the Canadian company Cameco.
“We believe this deal presents us with a fantastic opportunity to offer a truly substantive global alternative to Cameco,” said Mr. Purdy, who visited Canada this week to discuss the proposal with government officials.
The merger of the companies would make it easier to attract investors and increase the likelihood that Fission will complete its Patterson Lake South project by the end of the decade, Purdy said.
It expects to finance construction of Fission’s A$1.2 billion (US$1.3 billion) project through cash from Paladin’s Langer Heinrich operation in Namibia as well as traditional financing, including loans and offtake agreements.
Last month’s agreement by Perth-based Paladin to buy Fission for A$1.14 billion in an all-stock deal represents the first significant sign of consolidation in a sector that has been revitalized by global demand for nuclear energy.
As uranium prices rise amid growing supply concerns and countries reconsider nuclear power as a way to reduce carbon emissions, only a handful of companies are offering investors exposure to this nuclear reactor fuel.
The CEO expects that the company’s market value will increase after the acquisition of Fission and that the merged company will therefore have more financial strength to pursue its goals.
“We have strong relationships in the credit market and, as a $5 billion company, we are able to attract a variety of financing that Fission could not have obtained as an independent, small company,” Purdy said.
Paladin’s deal requires approval from the Canadian government, which more strictly scrutinizes deals involving critical minerals that involve foreign buyers. Mr. Purdy said he received a positive response from government officials on Tuesday when he visited Ottawa to discuss the proposal. The company expects the acquisition to close in September.
Bloomberg