A White Knight has appeared on the horizon to rescue Hathor Exploration (TSX:HAT) from a hostile takeover bid it called “predatory” and “opportunistic.”
On Wednesday, global mining giant Rio Tinto plc (LSE:RIO) tendered an all-cash offer for the Vancouver junior valued at $578 million or $4.15 per share.
Hathor, which is focused on developing the Roughrider uranium deposit in Saskatchewan’s Athabasca basin, Canada’s premier uranium mining district, has entered into a support agreement with Rio Tinto regarding the offer.
The deal trumps a $520 million bid for the company launched in August by Saskatoon-based Cameco (TSX:CCO), Canada’s leading uranium producer. (See “Hathor board calls for rejection of hostile bid” – BIV Business Today, September 14.)
Hathor CEO Mike Gunning called the Rio Tinto offer “superior”, adding that it provides fair value for shareholders over Cameco’s bid.
“The strategic context of the Rio Tinto offer underscores the ‘best of breed’ global stature of the Roughrider uranium deposit,” said Gunning.
Roughrider is Hathor’s flagship project and is believed to contain 60 million pounds of uranium.
The battle for the deposit comes at a time of depressed uranium prices following the crisis at Japan’s Fukushima power plant, and a decision by Germany to turn away from nuclear power.
The situation has created a buying opportunity for producers looking to feed their production profiles.
But Rio Tinto Energy chief executive Doug Ritchie believes the medium and long-term outlook for the uranium market is positive, adding that it will assume a “significant” role in the world’s primary energy needs.
The U.K.-based mining company already mines uranium in Namibia and Australia. At press time, Hathor’s shares were up 9% to $4.41.
Joel McKay
@jmckaybiv