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PERTH (miningweekly.com) – Dual-listed Paladin Energy has moved to take full control of junior uranium explorer Summit Resources, in which it already holds an 82.08% interest.
Paladin on Wednesday announced an off-market takeover offer for the remaining shares in the ASX-listed Summit, offering one new Paladin share for every one Summit share held.
Based on Paladin’s closing price on July 31, the offer valued Summit shares at 20c each, and if successful, will see Paladin issue 39.1-million new shares, representing some 2.28% of the company’s outstanding shares.
The offer has been unanimously recommended by Summit’s independent directors.
“Paladin’s offer provides Summit shareholders with an opportunity to become shareholders in a company that has exposure to a broader range of uranium projects and with a stock which has greater liquidity than what Summit currently enjoys,” said Summit nonexecutive director Mal Randall.
Paladin told shareholders that the offer for Summit was in line with the company’s continued cost optimisation initiatives, saying that by purchasing the outstanding third-party shares, and de-listing Summit, cost savings could be achieved in the areas of compliance and regulatory costs.
The offer is expected to close on October 12.
Summit’s main project is Isa North, in Queensland, which covers some 935 km2 and hosts a number of uranium prospects.
Paladin in May this year took the decision to mothball its Langer Heinrich uranium mine, in Namibia, as uranium prices continued to flounder.
Paladin was expecting the uranium market to normalise over the next few years, in the absence of any external shocks, with the company telling shareholders that curtailments by producers could serve to accelerate the anticipated market correction.
Last week, Canadian major Cameco announced that it would extend the suspension of the McArthur River in Saskatchewan – the world’s biggest uranium mine – and the nearby Key Lake for an “indeterminate duration”, owing to difficult market conditions.