Titan expands Athabasca holdings with Dejour deal

Vancouver — Dejour Enterprises (DJE-V, DJEFF-O) has agreed to hand over its uranium projects to Titan Uranium (TUE-V, TUEFF-O) in return for a 37% stake in the company, plus other considerations.

The proposed deal sees over 3,900 sq. km of Athabasca basin-area claims and permits transferred to Titan along with several million dollars of recent exploration data, boosting the junior’s portfolio and giving it one of the larger footprints in the region.

Dejour plans to focus on its core oil and gas projects in Mississippi, Texas, Colorado, Utah and southern Alberta while maintaining uranium market exposure through its stake in Titan. Under the deal, Dejour would receive 17.5 million Titan shares plus 3 million warrants exercisable at $2.00 apiece for two years. It would also retain a 1% net smelter royalty and a 10% carried working interest in each contributed property to the bankable feasibility level. The agreement would see Dejour with a pair of seats on Titan’s board as well as contributing members of its technical team.

Titan’s combined Athabasca holdings would total more than 5,800 sq. km, including sections of the five major conductive areas in the southwestern section of the basin. Many of the Dejour properties are adjacent and contiguous to Titan’s projects.

The deal is subject to due diligence, as well as shareholder and regulatory approvals being received by the end of January 2007.

Titan president and CEO Phil Olson said the deal would solidify the company’s position as a dominant explorer in the southwest region of the basin, adding that the company intends to “emerge as a sector consolidator” amongst juniors there.

Although it reports a treasury of more than $10 million, Titan announced planned financings over the next 6 to 12 months to fund tentative work programs on its projects.

Following a halt on trading for the announcement, shares of Titan closed up a penny at $2.30 on volume of 560,000 while Dejour lost 7 to $1.66 per share on trading volume of 445,000. Both companies, along with many other uranium explorers, have experienced recent share price increases due to an anticipated supply crunch following flooding at Cameco’s (CCO-T, CCJ-N) 50%-owned Cigar Lake uranium project.