Atha Energy has reached two separate agreements to acquire 92 Energy and Latitude Uranium, two Canadian uranium-exploring companies.
The company is also planning to raise around C$14m ($10.3m) in concurrent financing to fund the two transactions.
Under the terms of the definitive arrangement agreement with Latitude, Atha shareholders are entitled to receive 0.2769 shares of Atha for each share held.
This is a 68% premium to the stock’s closing price on 6 December 2023.
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The swap ratio offered under the binding scheme implementation deed with 92 Energy is 0.5834 shares of Atha for each share of 92 Energy.
This marks a 78% premium to 92 Energy’s stock close on 7 December 2023.
Atha stated that the combined company could provide its shareholders with exposure to 7.1 million acres of exploration area in some of the top three uranium jurisdictions in Canada.
The overall mineral estimate is expected to be 2.8 million tonnes at 0.69% triuranium octoxide (U3O8) containing 43.3 million pounds of U3O8 at the Angilak deposit.
Furthermore, it estimates 14.7 million tonnes at 0.03% U3O8 containing 5.2 million pounds of U3O8 indicated and 28.3 million tonnes at 0.03% U3O8 containing 4.4 million pounds of U3O8 inferred at Moran Lake.
It also estimates 5.1 million tonnes at 0.04% U3O8 containing 4.9 million pounds of U3O8 inferred at Anna Lake, within the Central Mineral Belt of Labrador.
The combined company is expected to benefit from improved liquidity and draw the interest of more institutional investors.
The merged business is forecast to have a cash balance of more than C$55m with no debt.
Assuming that Atha secures the concurrent financing, the company will be able to support its exploration activities well into 2025.
Atha CEO Troy Boisjoli said: “We are thrilled for ATHA to have such an incredible opportunity to create Canada’s premier exploration company during a period where the world’s increasing adoption of nuclear energy is calling for new supplies of uranium.
“By combining highly complementary exploration assets from across the exploration risk curve in top-tier Canadian mining jurisdictions, we believe the combined entity will own one of the most complete portfolios of uranium assets in the entire sector and are thrilled to be able to leverage the combined team’s technical and financial resources to maximise the value of this opportunity.”
As part of the concurrent financing, Atha entered an agreement with Eight Capital to act as co-lead agent and joint bookrunner with Canaccord Genuity.
It agreed to issue up to 6.4 million charitable flow-through shares and four million subscription receipts, for total gross proceeds of C$14m.