one of my favourite uranium stocks has been canadian explorer fission uranium corp that has just announced a merger with denison mines corp which is also from canada.
fission has the wow factor project and denison has some ok stuff but it's a little complicated with projects all over the place.
for some time now the fission ceo has been saying that they will prove up a few more pounds at their already impressive patterson lake south project and then sell it to the highest bidder like a cameco.
just about every analyst had price targets on fission way above what it has been trading at over the last couple of years. even just before the merger announcement fission had targets of over 100% above the trading price and fission has had a market cap sitting comfortably over u.s.$300 million for a large part of the last 12 months.
this proposed merger is considered to a merger of equals but in my opinion it absolutely sucks for fission shareholders.
the proposed joining of these two companies has in an instant resulted in a down grading of fission even though the merger is considered to be a win/win for fission and denison because it's being said that together they are bigger and they can could attract more of the institutional investor dollar which they sort of both need unless they are taken over.
my point to all this is that this deal is considered to have occurred due to deal metrics that currently exists in today's uranium market.
the tough thing for fission is that they are developing their project and this is where we can make a comparison to ags and our interest in four mile.
ags is now a producer with a 25%* interest in a whopper of a uranium asset that is looking like it will make a decent profit (ags perspective) on every pound of uranium sold even in today's spot market.
ags does not need to do a deal with anyone at the moment especially if any third party is pushing the idea that we currently live in a not so favourable deal metric environment.
fellow ags shareholders, lets not rush a deal. lets not do a fission uranium corporation type deal because we do not need to.
four mile is in production. ags should at least wait until the uranium sales judgement is handed down before making any decisions regarding ownership of our once in a lifetime 25%*.
too often others will attempt to project a manufactured reality for their own benefit.
we have all come this far. we must continue to stand united. we must not accept any opportunistic bid. not now, not ever.
AGS Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
