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- 92 Energy (ASX:92E) is merging with Canada’s ATHA Energy Corp
- ATHA is also acquiring another company making it a three-party merger
- Despite touting great things for its Gemini prospect, 92E is now looking to combine
- 92E’s Board and Directors will all vote in favour of a TSXV listing proposed by ATHA
- Shares last traded at 53 cents
As part of a merger with CSE-listed ATHA Energy Corp, ASX-listed uranium player 92 Energy (ASX:92E) is keen to list on the Toronto Stock Exchange.
In particular, 92 Energy has flagged to its shareholders the board will recommend they approve the proposed listing on the Ventures Exchange (TSXV) spearheaded by ATHA.
The TSXV is typically dominated by mining companies trying to springboard onto the larger overhead TSX proper.
The company outlined today it unanimously recommends the merger from the Board’s POV, and that “each director intends to vote all shares in favour of the scheme [underpinning the merger]”.
The TSXV ultimately acts as a small-cap index for Canadian-listed companies, similar to the US Russell 2000 smallcap index.
Macro background
In the background, the macroeconomic incentives behind the deal are probably obvious. Uranium futures are currently at US$106/lb on the NYMEX, which reflects a premium above even pre-Fukushima levels.
The commodity has been enjoying bullish sentiment this year as a late 2023 rise rallied into the new year.
Uranium futures first began rising based on a general increase in global governmental commitments to boosting nuclear energy uptake.
Since then, however, several geopolitical factors have also ratcheted up the tension in a good way.
The USA has moved to ban Russian uranium imports into the states, though, it has until 2028 to exploit a loophole.
In the meantime, Kazakhstani producer Kazatomprom has announced output issues to the world, which further saw prices increase.
Globally, stock market interest has been palpable.
Aussie uranium miners are finally enjoying better reception while the Global X Uranium ETF is responding in kind. Sprott, as ever, continues to add to their physical uranium holdings.
Acquisition and new listing
ATHA is seeking to list all its shares on the TSXV after acquiring another CSE-listed entity, so long as the relevant regulator approves it.
92E told its shareholders this morning that it will be vocal about advertising when such approval may be given.
However, ATHA is confident that it can navigate the bureaucratic landscape the merger and listing must traverse.
ATHA is already listed on the CSE (different to the TSX), but it believes it’s complying with all relevant overhead at CSE’s compliance office.
The partner in 92E’s merger deal is also acquiring CSE-listed Latitude Uranium. “Greater than 50 per cent” of shareholders must approve the strategy.
The merger has been in the works for a while but the addition of a TSXV listing is a new ambition brought forward by ATHA. It hasn’t led 92E to change its mind on the merger.
Management comment and market response
“[We welcome] ATHA’s move to apply to list its shares to the TSX Venture Exchange,” 92 Energy Managing Director Siobhan Lancaster said.
“All parties are making strong progress along the path to implementing what we believe will be a significant value-creating merger.”
As for why 92 Energy wants to list in Canada – it makes nothing but sense. The company’s assets are all in Canada’s Athabasca Basin.
It had most recently been developing its Gemini prospect, though, appears to see better odds of success in joining up with ATHA.
It had called the acreage an “investor sweet-spot” – maybe too sweet for its own tastes. Or maybe it was more sour than it realised.
92E shares last traded at 53 cents.
