Canadian government imposes conditions on Paladin Energy's takeover of Fission Uranium, limiting China's access to Canadian uranium.
Fission Uranium Corp. is developing the Patterson Lake South uranium project in the Athabasca Basin region of Saskatchewan, which is estimated to hold about five per cent of the global supply of the nuclear fuel. Paladin Energy has agreed to acquire Fission Uranium Corp. in a deal valued at $1.14-billion, but the Canadian government imposed several conditions on the takeover to limit China's access to uranium mined in Canada .
The deal, originally expected to close by the end of September, faced a lengthy national security review under Section 25.3 of the Investment Canada Act, due to significant Chinese influence on both sides of the acquisition. Fission's biggest shareholder is CGN Mining Co. Ltd., whose parent is state-owned China Uranium Development Co. Ltd. CGN also has an offtake agreement to purchase a certain amount of uranium from the Saskatchewan uranium project. Paladin has agreed to several conditions, including not selling any uranium produced at the Saskatchewan project to any party in China, except for existing contractual obligations to CGN which will last for three years out of the projected 10-year mine life. Paladin also agreed to not issue any new securities to CGN in a private placement and will not raise any money from any China-based source to fund the Patterson Lake South project
URANIUM CANADA CHINA INVESTMENT Paladin Energy
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