SXR Uranium One Acquistion ThwartedSXR Uranium One (TSE:SXR) received a nasty surprise today when mining giant RIO TINO (NYSE:RTP) pulled its offer of the Wyoming Sweetwater mill and adjacent properties to the uranium junior. The reason, of course, being that the Cigar Lake impetus has rocketed uranium prices and the original $110 million offer by SXR in the summer now to Rio Tinto does not seem to make as much sense. SXR shares were down sharply in today's trading session, shaving 7.8% as investors reacted disappointingly to the news.
So now, the company has several challenges: first, to seal its other 2006 summer deal with US Energy Corp for the Shootarang Mill in Utah, and secondly, to figure out what to do with its pile of cash; it had recently completed a $155 million offering of convertible debentures. The company already has said that it would not seek to purchase uranium explorers; personal speculation puts out the logical possibility that it would seek to buy one of the uranium near-producers with American properties: UR-ENERGY (TSE:URE), ENERGY METALS (NYSE:EMU TSE:EMC), STRATHMORE (CVE:STM), URANERZ (AMEX:URZ) are candidates, although Energy Metals has a generous market cap of around $650 million, while Ur-Energy (~$280 million), and Strathmore ($225 million) would be somewhat more palatable.
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