TORONTO (miningweekly.com) – Chinese firm CGN Mining has agreed to buy a 19.99% stake in Canadian explorer Fision Uranium, marking the first time a Chinese company has invested directly in a Canadian uranium company.

TSX-listed Fission reported that under terms of the deal, the two companies would proceed towards a C$82.22-million private placement, that would see CGN pay C$0.85 per Fission share – a 25% premium to Fission’s closing price on Friday.

The announcement sent Fission’s TSX-listed stock up 16% in morning trading.

"This is an historic moment for Canada's uranium industry. It is the first time a Chinese company has invested directly in a Canadian uranium company. We are thrilled that CGN Mining has chosen to invest in Fission, PLS and the Triple R deposit. CGN Mining's understanding of the uranium business is superb and we are excited at the opportunity to work with them,” Fission chairperson Dev Randhawa commented.

Kelowna, British Columbia-based Fission was exploring the Patterson Lake South uranium property – host to the world-class Triple R uranium deposit – the largest undeveloped uranium deposit in Canada’s Athabasca Basin District.

CGN supplied nuclear fuel, produces nuclear energy, and constructs plants for renewable energy such as wind power, hydroelectric and solar energy. CGN’s controlling shareholder was China Uranium Development Company, a fully-owned subsidiary of China General Nuclear Power Corp, which is a leading global clean energy corporation in China.

The two firms had also agreed to proceed towards entering into an offtake agreement under which CGN Mining would buy uranium production from the Company's PLS property when it became operational.

The offering was scheduled to close on January 29, and was subject to finalising documentation and securing regulatory and shareholder approvals.

An emerging 15% supply gap could signal a prolonged upturn in the uranium price through to 2024. A decline in secondary sources of yellowcake was forcing the market to increasingly rely on primary suppliers, which, when coupled with unprecedented growth in the nuclear reactor industry, foretold improved market conditions over the medium to long term.