China's CGN Mining buys stake in Canada's Fission Uranium
(Reuters) - China's CGN Mining Company Limited bought a nearly 20 percent stake in Fission Uranium Corp, marking the first time a Chinese company has directly invested in a Canadian uranium company, Fission said on Monday.
The C$82.2 million deal may lead to more Chinese investment in Canadian uranium developers such as Denison Mines Corp and Nexgen Energy Ltd, said Cantor Fitzgerald analyst Rob Chang. Canada is the world's second biggest uranium-producing country after Kazakhstan.
Uranium prices have been weak since the 2011 Fukushima tsunami and meltdown in Japan led to that country shutting down its reactors. Prices are expected to rebound in coming years partly because of China's aggressive construction of new reactors.
Fission shares rose 7.4 percent, or 5 Canadian cents, to 73 Canadian cents in Toronto in late morning trading. The stock touched its highest price since early September.
Kelowna, British Columbia-based Fission is developing the Triple R uranium deposit at Patterson Lake South in northern Saskatchewan. It and Denison called off a C$483 million merger agreement in October due to opposition from Fission's shareholders.
CGN agreed to pay 85 Canadian cents per share, a 25 percent premium to Fission's Friday close, for a 19.99 percent stake in the company.
CGN, a uranium trader, is controlled by China Uranium Development Company Ltd, a subsidiary of state-owned China General Nuclear Power Corporation.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Meredith Mazzilli)
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