ISENF - IsoEnergy and Consolidated Uranium Announce Merger to Create a Leading Diversified Uranium Company Focused on the World's Top Uranium Jurisdictions | Benzinga
SASKATOON, Saskatchewan and TORONTO, Sept. 27, 2023 (GLOBE NEWSWIRE) -- IsoEnergy Ltd. ("IsoEnergy") (TSXV:ISO, OTCQX:ISENF) and Consolidated Uranium Inc. ("Consolidated Uranium" or "CUR") (TSXV:CUR, OTCQX:CURUF) are pleased to announce that they have entered into a definitive arrangement agreement for a share-for-share merger of IsoEnergy and Consolidated Uranium (the "Arrangement Agreement"), pursuant to which IsoEnergy will acquire all of the issued and outstanding common shares of Consolidated Uranium not already held by IsoEnergy or its affiliates (the "CUR Shares") by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement" or the "Merger").
Under the terms of the Merger, Consolidated Uranium shareholders (the "Consolidated Uranium Shareholders") will receive 0.500 of a common share of IsoEnergy (each whole share, an "IsoEnergy Share") for each CUR Share held (the "Exchange Ratio"). The Exchange Ratio was determined giving consideration to recent weighted average prices for each of IsoEnergy and Consolidated Uranium for the period ended September 26, 2023. The implied fully diluted in the-money equity value of the combined company (the "Company") is estimated at approximately $903.5 million. Upon completion of the Merger, existing IsoEnergy and Consolidated Uranium shareholders will own approximately 70.5% and 29.5% of the Company, respectively, on a fully diluted in the-money basis.
Strategic Rationale for the Merger
- Built for the Current Uranium Market: Boasting an impressive suite of projects, with substantial current and historical resources, in top uranium mining jurisdictions, at varying stages of development, providing near, medium, and long term leverage to rising uranium prices.
- Focused Production Strategy: With the goal of building a globally significant, multi-asset, multi-jurisdiction uranium producer the Company will focus on restarting, developing and exploring its projects while looking to further expand the portfolio through M&A activity.
- Complimentary Project Base: Creates a globally diversified uranium company with near-term production, development and exploration projects in top tier jurisdictions, anchored by the world's highest grade indicated uranium resource located in Canada's Athabasca Basin and fully-permitted, conventional uranium mines in the U.S. ready for rapid restart.
- Global Exploration Potential: Provides investors with exposure to significant exploration upside across a diversified pipeline of properties situated in Canada, the U.S., Australia, and Argentina.
- Outstanding Leadership: The combined board and management have decades of experience, and a demonstrated track record, in all facets of uranium exploration, development and operations as well as industry leading capital markets expertise including M&A and finance.
- Enhanced Capital Markets Profile with Strong Shareholder Base: With a pro forma market cap of $903.5 million, the Company will rank among the top 10 publicly traded uranium focused companies in the world, allowing for greater access to capital and trading liquidity, strengthened position for future M&A and increased attractiveness among investors and utilities. Additionally, the Company will be backed by corporate and institutional investors including, NexGen Energy Ltd., Energy Fuels Inc., Mega Uranium Ltd., and uranium ETFs.
- Growing Uranium Market Presence: Scale and expertise creates opportunity to increase commercial participation in the nuclear fuel market.
President and CEO of IsoEnergy, Tim Gabruch, commented:
"We are very excited by this transaction as it creates a new, diversified, industry leading uranium development and exploration company of greater scale that is focused on growth in Canada, the United States and Australia, the world's premier uranium jurisdictions. This Merger provides our existing shareholders and new investors with an even greater opportunity to participate in the tremendous upside potential of our asset portfolio at a time when sentiment and support around the nuclear sector and the uranium industry in particular are increasingly positive. Together, our exceptional teams have the technical, capital markets, and uranium industry expertise to create significant shareholder value by growing the combined entity into the uranium company of choice."
Chairman and CEO of Consolidated Uranium, Philip Williams, commented:
"There is a great deal of common ground between IsoEnergy and Consolidated Uranium. The asset portfolios and culture of our two companies are complementary and, together, provides our respective shareholders with exposure to a larger company that consists of a proven leadership team, a strong pipeline of development and exploration growth prospects as well as an enhanced position within capital markets. We look forward to partnering with IsoEnergy to work towards the successful growth of the Company and its robust asset portfolio."
Benefits to Consolidated Uranium Shareholders
- Consistent with CUR's growth strategy of diversification across the best projects in the best jurisdictions.
- Entry to the Athabasca Basin, a leading uranium jurisdiction, with the high-grade Hurricane deposit and a portfolio of high-quality exploration-stage projects.
- Complimentary management and technical teams with a focus on production, development, and exploration.
- Addition of NexGen Energy Ltd. as a cornerstone shareholder of the Company brings market awareness and the potential to provide ongoing financial and technical support.
- Increased scale creates a stronger platform for future M&A.
- Participation in a larger company with greater access to capital, enhanced liquidity, and expanded research coverage.
- Significant and proportional Management and Board representation in pro forma company.
Benefits to IsoEnergy Shareholders
- Accretive to net asset value (NAV).
- Adds a substantial historical mineral resource base with significant upside potential1 including the largest undeveloped uranium resource in the United States.
- Exposure to high-quality, near-term producing uranium mines in Utah and a strategic portfolio of highly prospective uranium exploration properties in tier-one jurisdictions.
- Potential re-rating from near-term production, increased scale, asset and geographic diversification, as well as additional exploration upside.
- Better positioned for growth through M&A.
- Increased scale will position the company for greater access to capital and added liquidity.
Management Team & Board of Directors
The Company's board of directors (the "Company Board") will consist of six directors, four of whom were selected by IsoEnergy from the existing IsoEnergy directors, consisting of Richard Patricio (who will be appointed Chair), Leigh Curyer (who will be appointed Vice Chair), Chris McFadden and Peter Netupsky, and two of whom will be selected by Consolidated Uranium, consisting of Philip Williams and one other director from the existing CUR directors.
The senior management team of the Company will include Philip Williams as Chief Executive Officer, Tim Gabruch as President, Darryl Clark as Executive Vice President Exploration & Development, Graham du Preez as Chief Financial Officer, Marty Tunney as Chief Operating Officer and Dan Brisbin as Vice President, Exploration.
Board of Directors' Recommendations
Recommendation of the Consolidated Uranium Special Committee and Board
The Consolidated Uranium board of directors (the "Consolidated Uranium Board") appointed a special committee (the "Consolidated Uranium Special Committee") to consider and make a recommendation to the Consolidated Uranium Board with respect to the Arrangement. After consultation with its financial and legal advisors, and on the unanimous recommendation of the Consolidated Uranium Special Committee, the Consolidated Uranium Board unanimously determined that the Arrangement is in the best interests of Consolidated Uranium and approved the Arrangement Agreement. Accordingly, the Consolidated Uranium Board unanimously recommends that Consolidated Uranium Shareholders vote in favour of the resolution (the "Arrangement ...