Dev Randhawa and Fission Uranium have had investors intrigued for some time now, Dev with his colourful personality and Fission for its highly prospective Patterson Lake South (“PLS”) uranium property located on the southwest region of the world renowned Athabasca Basin.
PLS has been noted as the largest undeveloped deposit in the Athabasca Basin and atypical to the industry, out of its resource estimate of 105.5 million pounds U308 (Indicated and Inferred), a vast majority, 79.6 million pounds, sits in the indicated category.
The company papered the walls with off-scale results from its two year stint of drilling at the Triple R deposit. It was rich, vast and shallow, and both traders and market analysts began to salivate. Dev was there leading the charge, announcing to the world that the company had ‘earned the right to keep developing the project for a while yet’, but could not ‘control when someone will try to buy the company’.
After the resource estimates were released in January 2015, shares in Fission took a decided northward trend from $0.91 per share with Dev announcing during an interview at the Vancouver Resource Investment Conference at the end of January that Fission stock should be worth $3.00 per share. SP climbed almost halfway to Dev’s prediction, arriving at $1.34 per share in March, but uranium wasn’t performing well on the commodities market and began a slide that would take it down almost US$4.0 per pound by May.
Dev remained bullish on uranium’s prospects and continued to push Fission to further development PLS. He also remained adamant that the company would soon fall into the clutches of a lucrative takeover bid from the likes of Cameco, but instead of the world’s largest uranium producer stepping up to Fission with an offer, Dev announced in July that Fission and another junior uranium miner based out of Toronto, Denison Mines, would merge, creating a uranium powerhouse in the Basin.
Even though analysts and industry pundits saw potential in the transaction that would create a new entity, Denison Energy, with industry icon, Lukas Lundin, as chairman, retail investors with Fission felt that they were getting the short end of the stick and formed a group called FCU Oversight to question what they thought was a bad deal.
Dev was called to the carpet for having announced the deal a good two months before releasing the PEA on the Triple R deposit, which they thought would have forced a better price for what Fission had to offer. Others felt that the timing of the transaction was off as the uranium market as well as markets in general were performing poorly. Not to mention that China, one of the world’s largest buyers of uranium, was suffering from a slowing economy.
As share prices continued to fall for both Fission and Denison, discontent continued to rise amongst shareholders. Dev hit the promotional trial, hoping to put the growing doubt to rest. According to an interview on BNN.CA back in August, Dev defended the merger stating there was huge money on the table looking to invest $100.0 million or better and he felt that the Denison Energy option would prove to be the ‘go to’ stock next to industry giants such as Cameco.
Dev also went on to explain the SP slip for both Fission and Denison, attributing the drop to the falling commodities market rather than an indictment of the deal. He went on to extoll the virtue and worth of Denison’s mill and Wheeler River property. However, doubts still remained.
Finally in October, Lukas Ludin, Dev and Denison CEO, David Cates, put on a town hall meeting in Toronto. Shareholders were tense and the atmosphere was palpable as Dev was assailed by questions in regards to the merger. When questioned about the quality of the deal, he responded that there was no better deal for Fission available and said the company was also ‘paying for the mistakes this industry has made’, referring to the overpaying for assets in the recent Rio Tinto $654 million takeover of Hathor Exploration.
Randhawa went on to affirm that, ‘I would not do anything to screw our shareholders’ and when he was finally questioned about $1.2 million being given to certain officers and directors who would be transitioning to new positions in the merged company, he answered in true Dev form, ‘That million was for my staff, and that’s why the 99% hate the 1%. If you do not like that, then you can sell the stock.’
Retail investors remained reticent, despite the trios protestation that the Fission Denison merger was in everybody’s best interests and today that doubt came to a head when the transaction failed to get a two-thirds shareholder approval, effectively killing the deal.
But the issues raised during this battle continue with certain shareholders calling for Dev’s removal as Fission CEO, alleging he is autocratic, out-of-touch and, along with the rest of the management team, a spendthrift in a time when the company needs to be cost conscious. It will be interesting to see how this fallout unfolds over the coming weeks.