After being trumped last year in a bidding war with Rio Tinto (RIO-N) for Hathor Exploration and its Roughrider uranium deposit, Cameco (CCO-T, CCJ-N) is back on the acquisition trail, announcing on March 2 that it plans to buy Areva’s 27.94% stake in the Millennium uranium project in northern Saskatchewan for $150 million.
The proposed uranium mine in the Athabasca basin has indicated resources of 507,800 tonnes grading 4.55% U3O8 for 50.9 million contained lbs. U3O8 and inferred resources of 297,800 tonnes grading 2.54% for 16.7 million lbs. U3O8.
The project area is one of 12 mineral claims held by the Cree Lake Extension joint-venture exploration project, in which Cameco holds 41.96%; JCU (Canada) Exploration Company, 30.1%; and Areva Resources Canada, 27.94%.
Cameco is already the operator of the Millennium joint venture.
The 5.9-sq.-km Millennium mineral claim will be designated as a separate project area under the Cree Lake Extension joint venture. If JCU does not exercise its rights of refusal, Cameco will acquire the entire 27.94% interest from Areva, increasing its ownership interest in the project to 69.9%.
If JCU elects to exercise its rights, it will acquire an additional 11.67% interest and Cameco will acquire an additional 16.27% interest, increasing Cameco’s ownership in the project to 58.23%.
Under the agreement, Areva will receive a 4% royalty on revenue from 27.94% of any production that exceeds 63 million lbs. packaged uranium concentrate.
The transaction is expected to close by June 6.
Over the last year Canada’s largest uranium miner has traded within a range of $17.25 to $40.18.
In New York Cameco’s shares closed down 56¢, or 2.26%, at US$24.19 within a 52-week trading range of US$16.59 to US$41.43.
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