Impact: Positive
UEX has signed an amended agreement with Overseas Uranium Resources Development Co Ltd. (OURD) to acquire a 100%-interest in its wholly-owned subsidiary, JCU (Canada) Exploration Co Ltd. Per the new terms, UEX will pay C$41M to purchase JCU and subsequently sell 50% to Denison Mines Corp. (TSX:DML, Not Rated). The purchase price exceeds UEX’s original C$10M offer made in Apr/21. We view this deal as a positive de-risking solution given Denison’s higher bid, and see it still as a transformative acquisition, but with dilutive consequences. Ironically, while Denison’s bid for JCU drove up the price, it was also Denison that helped UEX bridge acquisition financing. We are revising UEX’s target price to C$0.70/sh (was C$0.80/sh) on the reduction in ownership of JCU’s assets.