Ur-Energy Inc. (NYSE: URG) (TSX: URE) is raising USD$60 million through a public offering to pay for an aggressive round of uranium mining acquisitions and develop its present mining projects.
In a filing made on Friday, the company said that it’s constantly looking for opportunities to expand its portfolio of uranium projects. John Cash, the chairman, CEO and president of Ur-Energy made it clear that the company doesn’t have any acquisitions in sight right now.
Ur-Energy plans to use the net proceeds from the offering to supplement working capital for the continued ramp-up at Lost Creek. The company will also support development at Shirley Basin, pursue possible future acquisitions or other strategic transactions.
“We are preparing our war chest so that we are ready for any opportunities. There is nothing that we can discuss publicly,” said John Cash, chairman, CEO and president of Ur-Energy.
“There certainly is room for consolidation and efficiencies at the mine and at the corporate level. We think there are some strong possibilities for consolidation in the industry.”
There has been some big moves in the uranium space with a large one focused in Wyoming.
For instance, this summer Australian-based Paladin Energy Ltd. (ASX: PDN) announced a USD$1.14 billion all-stock takeover of Canada’s Fission Uranium Corp.
This combination is expected to close in the fall. It will rank Paladin and Fission Uranium third in output, behind top producer Kazatomprom, controlled by the government of Kazakhstan, and Canada’s Cameco Corp. (TSX: CCJ) (NYSE: CCO).
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Acquisitions heating up in uranium space
Cameco’s facilities include the Smith Ranch-Highland in situ uranium mine near Glenrock and a satellite in situ uranium mine near Wright, as well as the Crow Butte in situ uranium mine near Crawford, Nebraska.
In-situ mining involves drilling with water derricks that go down a few hundred feet into a bed of porous sandstone. That’s where the company finds a thick layer of uranium deposits. Cameco operates uranium processing factories at Smith Ranch-Highland and Crow Butte. These produce up to 7.5 million pounds of uranium yellowcake each year, which becomes fuel for nuclear reactors after further processing elsewhere.
In addition to the Paladin and Fission Uranium deal, four smaller uranium mining companies based in Canada merged in recent months. ATHA Energy Corp. (TSXV: SASK) (OTCQB: SASKF) (FRA: X5U) and Latitude Uranium completed their merger in March, while IsoEnergy Ltd. (TSX: ISO) (OTCQX: ISENF) combined with Consolidated Uranium in December.
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