Premier American Uranium (TSXV: PUR, US-OTC: PAUIF) agreed to buy Nuclear Fuels (CSE: NF; US-OTC: NFUNF) to create one of the largest U.S. uranium explorers. Nuclear Fuels stock soared.
Nuclear Fuels shareholders will receive 0.33 of a common share of Premier American for each share held, the companies said Thursday in a joint statement. This implies a payment of about 43? per share, which would value Nuclear Fuels at about $31 million (C$42 million). The implied equity value of the combined company is estimated at about $102 million, Premier American said.
Adding Nuclear Fuels, which is advancing the pre-resource Kaycee uranium project in Wyoming's Powder River basin, would help Toronto-based Premier American expand its exploration portfolio to 12 properties in several key U.S. uranium districts.
"Kaycee is an exciting in-situ recovery prospect that, in combination with our own Cyclone project, is expected to position Premier American as one of the most active uranium explorers in Wyoming," CEO Colin Healey said. Healy will remain as head of the company once the deal has been completed, Premier American said.
Backed by founding shareholders Sachem Cove Partners and IsoEnergy (TSX: ISO), as well as enCore Energy (TSX-V, NASDAQ: EU) and Mega Uranium (TSX: MGA), Premier American will have "a clear mandate for U.S. uranium consolidation," the company said.
Nuclear Fuels surged 23% to 34.5? in Toronto Thursday morning, giving the company a market capitalization of about C$34 million. Premier American was unchanged at C$1.31 for a market capitalization of about C$46 million.
Closing of the proposed transaction is expected in the third quarter, Premier American said. It will require approval by at least two-thirds of the votes cast by Nuclear Fuels shareholders.
The deal represents a premium of 54% to Nuclear Fuels' Wednesday closing price on the Canadian Securities Exchange and a 46% premium to the 20-day trading average of the stock, Premier American said. Nuclear Fuels has about 97.88 million shares outstanding, according to data compiled by TSX Group.
Existing Premier American Uranium shareholders will own about 59% of the company once the deal has closed, compared with 41% for Nuclear Fuels shareholders.
Assuming the deal is completed, Premier American's combined project portfolio will span more than 420.8 sq. km and include projects from near-term development to early-stage exploration. Additional assets in Colorado, Utah, and Arizona provide further growth potential.
With $14 million in cash, Premier American said it expects to have the financial flexibility to "aggressively advance" the combined portfolio and evaluate further acquisition opportunities.
The company plans to release a mineral resource update and preliminary economic assessment for its Cebolleta project in New Mexico's Grants mineral belt this summer, with potential expansion drilling to follow.
Kaycee spans a 35-mile trend of altered and mineralized sandstones, supported by over 4,200 drill holes. Nuclear Fuels also holds five exploration-stage projects across key uranium districts in Wyoming, Utah, and Arizona.
Nuclear Fuels, which acquired Kaycee from enCore in 2022, has completed 411 exploration drill holes covering 68,659 metres in the past two years. EnCore retains a buyback option to acquire 51% of the project.