Takeover targets in the Athabasca Basin

The takeover of junior uranium company Hathor Exploration Ltd. is almost a done deal, as Rio Tinto Ltd. has taken up most of the shares. However, there are plenty of other acquisition targets in Saskatchewan’s Athabasca Basin besides Hathor, according to Dundee Securities analyst David Talbot. And with Rio Tinto showing it wants to be a player in the region, he would not be surprised to see a few more deals.

He identified a few companies that would make logical takeover targets. In each case, their stock prices are pretty cheap because of the Fukushima nuclear disaster and general equity market weakness:

Fission Energy Corp.: Mr. Talbot believes Fission’s Waterbury Lake project may be the “best and most prospective emerging deposit” in the basin that is controlled by a junior miner. Plus, it is only 140 kilometres away from Hathor’s Roughrider deposit.

UEX Corp.: UEX owns 49% of the Shea Creek project in a joint venture with French firm AREVA. This is a big deposit, with 88 million pounds of uranium, and Mr. Talbot expects that it will grow beyond 100 million pounds with more drilling.

Forum Uranium Corp.: It has some interesting Athabasca plays, as well as the prospective North Thelon project in Nunavut.

Pitchstone Exploration Ltd.: A microcap company working on some projects in the Athabasca. It also has assets in Namibia that are close to Rio Tinto’s Rossing mine.

In addition to the juniors, Mr. Talbot addressed the rumours that AREVA may be looking to sell assets in the Athabasca. He wrote that the company would be unlikely to sell its stakes in the ultra-rich McArthur River and Cigar Lake projects. However, it may be willing to sell non-core assets, including its interests in the Shea Creek and McClean Lake deposits.

If Rio Tinto does buy assets from AREVA, Mr. Talbot wrote that it may target Denison Mines Corp.’s Canadian operations as well. Denison owns minority interests in key deposits in the Athabasca, and an acquisition would clean up the ownership structures, he noted.