Uranium One target raised to C$4.60 from C $3.60TD Ameritrade - Target raised to C $4.20 from $3.60 by Andrew Willis
06/17/09
Junior mining play Uranium One is junior no more after striking its
second major global alliance with Rosatom Corp., Russia’s state-owned
nuclear company.
Uranium One announced Monday that it will take a 50 per cent stake in
mine owned by an arm of Rosatom called AMRZ. In return, ARMZ will get
$90-million (U.S.) in cash and a 17 per cent stake in Uramium One.
The deal gives Uranium One access to Rosatom refining operations, and
a guaranteed buyer for its enriched uranium production. These
developments come in the wake of a deal in February that saw Japanese
nuclear power companies take a $270-million (Canadian) stake in the
Canadian company, again, in return for guaranteed access to fuel.
Uranium One has been on something of a rollercoaster ride recently,
due to political scandals in Kazakhstan, where the company owns mines.
The company has consistently said that the Kazak squabble will not
affect Uranium One’s operations, and the deal with Rosatom supports
this assertion.
Prior to the announcement of the Rosatom transaction, Uranium One had
a $1.3-billion market capitalization. The alliance with the Russians
gives new heft to what was a company with relatively concentrated
holdings. Uranium One should attract new interest from international
investors as a result.
BMO Nesbitt Burns advised Uranium One on the transaction, with legal
input from Fasken Martineau DuMoulin and Macleod Dixon.
Goldman Sachs was the financial advisor to ARMZ, along with law firms
Stikeman Elliott, Allen & Overy and Aequitas.