ATHA ups financing to $22.8M on interest in three-way uranium junior merger

ATHA Energy (CSE: SASK; US-OTC: SASKF) has sealed two separate all-stock deals to acquire Latitude Uranium (CSE: LUR) and 92 Energy (ASX: 92E) to create what it says will be a leading Canadian uranium exploration company.

Shortly after announcing the deals yesterday, ATHA said it would upsize a planned $14.05 million private placement financing to $22.8 million. The strong demand from investors comes as uranium prices have steadily climbed this year — counter to the prevailing downward trend in commodities — with forecasts that it will strengthen further in 2024.

The funds will be used to advance exploration of ATHA’s new expanded portfolio.

“We are thrilled for ATHA to have such an incredible opportunity to create Canada’s premier exploration company during a period where the world’s increasing adoption of nuclear energy is calling for new supplies of uranium,” ATHA chief executive Troy Boisjoli said in a release.

ATHA holds the largest cumulative exploration package in each of the Athabasca and Thelon basins, two of the world’s most prominent regions for uranium discoveries, located in Saskatchewan and Nunavut, respectively. In all, it has  more than 24,600 sq. km. 

Exploration-stage Latitude is focused on the Angilak project in Nunavut and the CMB project in Newfoundland and Labrador. Together, the Angilak and CMB projects host significant historical resources (57 million lb. U₃O₈), with current work focused on district-scale exploration.

92 Energy has nine exploration projects in the Athabasca basin region, including its September 2021 Gemini discovery, 27 km southeast of Cameco‘s (TSX: CCO; NYSE: CCJ) 70%-owned McArthur River uranium mine.

The deal to acquire Latitude will see ATHA issue 0.2769 of a common share per Latitude share acquired. This gives Latitude shares an implied value of 28¢ each, representing a 68% premium to its most recent closing price.

Under the 92E arrangement, ATHA will issue 0.5834 of a common stock for each 92E share, for an implied consideration of 58¢ per share and a 78% premium. Upon completion, 92E will be delisted from the Australian Stock Exchange.

The combined company is expected have an implied market value of roughly $267 million, with existing shareholders of ATHA, Latitude and 92E owning approximately 49.3%, 25.9%, and 25.4% of the company respectively.

“This merger helps realize the true value of 92E assets, while combining three excellent teams that have the resources to pursue uranium exploration at an unprecedented scale,” 92 Energy CEO Siobahn Lancaster added.

The combined company, according to Latitude’s CEO John Jentz, will be fully funded with $55 million in cash and boasts a suite of highly complementary uranium assets across the exploration spectrum.

In addition to its directly held ground, ATHA has a 10% carried interest portfolio of claims in the Athabasca operated by NexGen Energy (TSX: NXE) and Iso Energy (TSXV: ISO).

Shares of ATHA Energy gained 6.5% to 99¢ each by market close Thursday for a market capitalization of $125.1 million. Meanwhile, shares of Latitude closed 36.4% higher at 22.5¢ for a $45.9 million market cap. 92E shares rose A10.2¢ or 36.5% in Australia. It has a market cap of A$46.7 million.