Canadian Uranium Companies Could Be on China’s Acquisition List as it becomes Aggressive on Nuclear Energy Policy

Published: Wed 27 May 2015
A blog entry by Ivan Gary

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Ivan Gary
Market Research Executive

Ivan Gary's Blog

With China having adopted an aggressive stance on its nuclear energy ambitions, the country is now scouring the world for potential uranium acquisitions. According to latest reports, a number of Canadian companies could be on China’s list for such acquisitions.
The China National Nuclear Corp’s head, Wang Ying, had commented earlier in May that China is on the lookout for companies that own large uranium deposits at low costs, so the country can move fulfill its domestic uranium demand faster. He had also outlined a few criteria that will drive this acquisition spree. Factors that the country will consider before making an acquisition bid are whether the company has uranium resources amounting to at least 30,000 tons, whether the cash production of the company is equal to or less than US$25 per pound and whether the total cost of production of the company stands at US$45 a pound or less.
Commenting on these factors, a senior market analyst specializing in the mining and metal industry said that based on these criteria, at least four companies from Canada could be on China’s list as they meet the aforementioned requirements.
One of these companies would be the Patterson Lake South project owned by Fission Uranium Corp. This project meets China’s criteria on the size front; however, the costs are yet to be finalized. While the Millennium uranium deposits held by Cameco Corp. is slightly shy of the size criterion, it meets the cost requirement. The Shea Creek deposit owned by UEX Corp could also fall under this bracket but costs are yet to be determined. The last company that could be on China’s shortlist is the Roughrider project which is owned by Rio Tinto Canada Uranium Corp. This project could stand a high chance of being acquired by China because it is not only the right size, but also fits in the cost range specified by the country.
However, the CNNC head also added that acquisitions would be conducted over a five-year period and with that, it remains to be seen whether any new projects join this list of prospects.

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