VANCOUVER (miningweekly.com) – Canadian explorer Fission Uranium has closed a strategic C$82.22-million financing with Chinese investor CGN Mining, marking the first time a Chinese company has invested directly in a Canadian uranium company.
TSX- and Frankfurt-listed Fission had issued 96.7-million shares to CGN at C$0.85 apiece.
Fission stated that it would use the proceeds of the offering to develop the Patterson Lake South property – host to the world-class Triple R uranium deposit – the largest undeveloped uranium deposit in Canada’s Athabasca Basin District.
The junior would also use proceeds to pay adviser fees and costs in relation to certain approved transactions and for general administrative expenses.
CGN supplies nuclear fuel, produces nuclear energy, and constructs plants for renewable energy such as wind power, hydroelectric and solar energy. CGN’s controlling shareholder is China Uranium Development Company, a fully owned subsidiary of China General Nuclear Power Corp, which is a leading global clean energy corporation in China.
The two firms had also agreed to proceed towards entering into an offtake agreement under which CGN Mining would buy uranium production from the company's PLS property when it became operational.
Analysts attending the recent Vancouver Resource Investment Conference 2016 sketched a bullish scenario for uranium, as a 15% supply gap was emerging that could signal a prolonged upturn in the uranium price through to 2024.
A decline in secondary sources of yellowcake was forcing the market to increasingly rely on primary suppliers, which, when coupled with unprecedented growth in the nuclear reactor industry, presaged improved market conditions over the medium to long term.