TORONTO, Dec. 07, 2023 (GLOBE NEWSWIRE) -- Latitude Uranium Inc. ("Latitude Uranium" or "LUR") (CSE:LUR) (OTCQB:LURAF) (FRA: EI1) is pleased to announced that today it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with ATHA Energy Corp. (CSE:SASK) (OTCQB:SASKF) (FRA: X5U) ("ATHA") pursuant to which ATHA will acquire all of the issued and outstanding common shares of Latitude (the "Latitude Shares") by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement").
Under the terms of the Latitude Arrangement, Latitude shareholders (the "Latitude Shareholders") will receive 0.2769 of a common share of ATHA (each whole share, an "ATHA Share") for each Latitude Share held (the "Latitude Exchange Ratio"). The Latitude Exchange Ratio was determined giving consideration to recent average trading prices for each of Latitude and ATHA. Based upon ATHA's reference price of C$1.00, the implied consideration per Latitude Share is C$0.28, representing a 68% premium to Latitude's closing price on December 6, 2023.
ATHA has also entered into a binding scheme implementation deed (the "92E SID") with 92 Energy Limited (ASX: 92E) ("92E") pursuant to which ATHA will acquire all of the issued and outstanding common shares of 92E (the "92E Shares") by way of a scheme of arrangement pursuant to Part 5.1 of the Australian Corporations Act 2001 (Cth) (the "92E Scheme", together with the Arrangement, the "Transactions"). ATHA has also announced its intention to complete one or more financings to raise up to $14 million concurrent with the completion of the Transactions (the "Concurrent Financing").
Assuming the completion of both the Arrangement and the 92E Scheme, but before giving effect to the Concurrent Financing (see ATHA's press release dated December 7, 2023), the implied market value of pro forma ATHA (the "Company") is expected to be approximately $267 million with existing shareholders of ATHA, Latitude Uranium and 92E owning approximately 49.25%, 25.37% and 25.38% of the Company, respectively.1
The Company's board of directors (the "Company Board") will consist of up to six directors, four of whom will be selected by ATHA from the existing ATHA directors, one of whom will be selected by Latitude Uranium from the existing Latitude Uranium directors, and one of whom will be selected by 92E from the existing 92E directors.
Strategic Rationale for the Transaction:
- Largest Exploration Portfolio in Canada: The Company is expected to provide shareholders with exposure to 7.1 million acres of exploration acreage spread across Canada's top three uranium jurisdictions, including the largest holdings in both the Athabasca Basin (Saskatchewan) and Thelon Basin (Nunavut) – two of the highest-grade uranium districts in the world.
- Historical Resources with Expansion Potential: The Company will hold two projects with significant expansion potential with historical mineral resource estimates of:
- 2.8 million tons at 0.69% U3O8 containing 43.3 million lbs of U3O8 Inferred at the Angilak Deposit in Nunavut2
- 14.7 million tons at 0.03% U3O8 containing 5.2 million lbs of U3O8 Indicated and 28.3 million tons at 0.03% U3O8 containing 4.4 million lbs of U3O8 Inferred at Moran Lake3 and 5.1 million tons at 0.04% U3O8 containing 4.9 million lbs of U3O8 Inferred at Anna Lake4, both in the Central Mineral Belt ("CMB") of Labrador
- Provides Exposure to a Recent Discovery Along a Mineralized Trend: The Gemini discovery in the Athabasca Basin is a high grade, basement hosted discovery along a mineralized trend with significant potential for additional discoveries along an underexplored corridor.
- Robust Pipeline of Exploration Catalysts: The planned 2024 exploration program is expected to include: Post-discovery corridor expansion geophysics and drilling, greenfield exploration programs and results from NexGen Energy's summer 2023 drilling program on areas including ATHA's 10% carried interest, which constitutes NexGen Energy's largest exploration program since the discovery of the Arrow deposit.
- Strong Balance Sheet to Execute on Growth Initiatives: With no debt and a forecast cash balance of over $55 million5 on completion of the Transactions and Concurrent Financing, the Company's exploration activities are expected to be fully funded well into 2025.
- Exceptional Leadership Team: The amalgamated board and management team of the Company have decades of experience, with a demonstrated track record in all facets of uranium exploration, development operations, and capital formation needed to drive growth in uranium resources and build shareholder value.
- Strengthened Capital Markets Profile: Significantly larger market capitalization of the Company is expected to improve liquidity and attract increased institutional investor interest.
John Jentz, Chief Executive Officer of Latitude Uranium, commented: "We are very excited to be part of such a transformative transaction to create an unparalleled uranium exploration company focused on Canada's three major uranium districts. The benefits for LUR shareholders are clear, an immediate increase in value combined with on-going exposure to one of the most robust portfolios of high-upside uranium assets in the entire sector. The combined company will be fully funded with $55 million4 in cash and boasts a suite of highly complementary uranium assets across the exploration spectrum. The combined company will have increased scale and prospectivity and we believe it will be a go-to name in the uranium exploration industry."
Benefits to LUR Shareholders
- Immediate premium to LUR Shareholders of 56.1% based on the closing price of the ATHA Shares on the CSE on December 6, 2023;
- Combines complimentary exploration assets to become the most complete vehicle for uranium exploration exposure in Canada;
- Entry to the Athabasca Basin with exposure to a significant pipeline of fully funded and ongoing exploration projects including the Gemini Discovery and carried interest upside on active exploration blocks held by NexGen and IsoEnergy;
- Improved access to capital and estimated resulting cash balance of over $55 million5;
- Complimentary management and technical teams with a focus on development, and exploration;
- Increased scale creates a stronger platform for future M&A, greater access to capital and expanded research coverage;
- Potential inclusion to uranium focused ETFs which will bolster liquidity and enhance capital markets profile; and
- Potential re-rating from asset diversification, as well as additional exploration upside.
Board of Directors' Recommendations
After consultation with its financial and legal advisors, the board of directors of Latitude Uranium (the "Latitude Board") unanimously determined that the Arrangement is in the best interests of Latitude Uranium and approved the Arrangement Agreement. Accordingly, the Latitude Board unanimously recommends that Latitude Shareholders vote in favour of the resolution (the "Arrangement Resolution") to approve the Arrangement.
PI Financial Corp. and Red Cloud Securities Inc. have provided a fairness opinion to the Latitude Board, stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to the Latitude Shareholders under the Arrangement Resolution is fair, from a financial point of view, to Latitude Shareholders (the "Latitude Fairness Opinions").
The full text of the Latitude Fairness Opinions, which describe, among other things, the assumptions made, procedures followed, factors considered and limitations and qualifications on the review undertaken, and the terms and conditions of the Arrangement, will be included in the management information circular of Latitude Uranium (the "Latitude Circular"), to be delivered to Latitude Shareholders in respect of a special meeting of the Latitude Shareholders to be held to consider the Arrangement (the "Latitude Meeting"), which is expected to take place in Q1 2024.
The Arrangement
The Arrangement will be effected by way of a court-approved plan of arrangement pursuant to the Business Corporations Act (Ontario) requiring: the approval of (i) the Ontario Superior Court of Justice (Commercial List), and (ii) (A) 66 2/3% of the votes cast on the Arrangement Resolution (as defined below) by the Latitude Shareholders; (B) if required, a simple majority of the votes cast ...