TORONTO (miningweekly.com) – Canadian uranium miner Denison Mines has signed a letter of intent to buy explorer Northern Continental, in an all-share transaction.

Northern Continental holds a 60% interest in the Russell Lake uranium property, adjacent to Denison's Wheeler River uranium discovery, in the Athabasca Basin of northern Saskatchewan.

Hathor Exploration owns the other 40% of the Russell Lake property, which exhibits “a number of strong targets”.

Denison will exchange 0,092 of its own shares for each Northern Continental share, valuing the smaller firm at $0,206 a share, which is a 64,8% premium, based on closing prices on April 30.

“Through this transaction, Denison will consolidate, as one contiguous package, its land position between Wheeler River and another important Denison discovery in the Basin, Moore Lake,” the company said in a statement.

Denison announced earlier this month that it had found additional high-grade uranium mineralisation about 300 m to the northeast from an initial high-grade zone discovered and reported earlier in the winter, at the Wheeler River project.

The Wheeler River project is a joint venture among Denison (60%), Cameco Corp. (30%) and JCU (Canada) Exploration Company, Limited (10%).

Once the Northern Continental transaction closes, which is expected to be in July, former shareholders of the company will hold approximately 2,2% of the outstanding shares of Denison.

On Thursday, Denison announced it had appointed chairperson Lukas Lundin as acting CEO, until a replacement is found for Peter Farmer, who has resigned.

Shares in the company rose 8,04% on Friday, to C$2,42 apiece by 14:28 in Toronto.

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