BIG uranium producer Cameco has left open the option to come back with an increased offer for fellow Canadian Hathor Exploration, in opposition to Rio Tinto’s $C578 million ($A549 million) white-knight bid for the company.
In briefings with analysts, Cameco would say only that it had extended its $C3.75 a share offer until November 14 and that the market would be hearing from the company ”in due course”.
The market is betting that Cameco will come back with a higher offer.That is reflected in Hathor’s last sale price of $C4.75 a share – a premium to the agreed $C4.15-a-share bid that Rio launched for Hathor on October 19.
Hathor owns the high-grade Roughrider deposit in Canada’s Athabasca Basin in northern Saskatchewan. Cameco dominates the Athabasca, which is home to more than 23 per cent of the global supply of uranium.
While an increased offer from Cameco would draw on synergies in the Athabasca that Rio does not enjoy, a higher offer would also trigger a $C20 million break fee that Rio secured on its agreed bid with Hathor.
The Canadian media continues to speculate that Cameco and Rio could come to an arrangement about the ownership of the yet-to-be-developed Roughrider, should Rio win the day in the Hathor battle.
That is because Canada limits foreign ownership of producing uranium mines to 49 per cent. Higher levels are permissible if the project is considered Canadian-controlled or if a Canadian partner cannot be found.
Meanwhile, Cameco has also revealed that there will be a delay in completing the pre-feasibility study in the development of one of Australia’s biggest undeveloped uranium projects, the Kintyre deposit in Western Australia.
It was due to be completed by the end of 2011 but limited access to the remote site due to bad weather and changes in the scope of the study mean it will not be completed until mid-2012.
Cameco and its Japanese partner, Mitsubishi, acquired the project from Rio in 2008 and have said previously that construction was due to start in 2013. However, that deadline now looks unlikely to be met.