Why Denison Mines stock jumped 11% today
Shares of a Canadian uranium exploration, development and production company Denison Mines (NYSEMKT: DNN) jumped to double digits today after the company made an offer to buy JCU Exploration. Denison’s shares closed today’s session 11% higher.
Yesterday Denison made an offer to Overseas Uranium Resources Development (OURD) to acquire 100% ownership of JCU, a subsidiary of OURD. In a statement, Denison’s management said, “Denison welcomes the opportunity to build on its long history of partnering with OURD and JCU to complete the JCU acquisition, as featured in Denison’s offer, and bring a significant additional benefit to the shareholders of OURD. ” But there is also a complication.
At the end of April, the Canadian uranium and cobalt exploration and development company UEX also offered to acquire JCU, and it says its agreement is binding after being approved by the board of directors of OURD. UEX added in a statement: “The UEX agreement with OURD is binding and enforceable and it is not open to OURD to consider competing proposals.”
Denison’s flagship project is the Wheeler River Uranium Project in northern Saskatchewan, Canada. The project is 90% owned by Denison, with the remaining 10% owned by JCU. Denison offers to buy JCU with cash up to C $ 40.5 million, plus debt assumption.
Denison said his offer is binding subject to “the termination of the final purchase agreement existing between OURD and UEX Corporation in accordance with its terms.” Shareholders now seem to think Denison will be able to close the mining deal.
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