NEW YORK (TheStreet) -- Denison Mines (DNN - Get Report) is gaining on Thursday after announcing it had signed a letter of intent to acquire the uranium assets of Vancouver-based International Enexco Limited. As part of the acquisition, Denison would purchase all Enexco shares but spin off its copper assets into an independent company.
By midmorning, shares had added 6.5% to $1.65.
In the non-binding letter, Denison proposes to acquire all issued and outstanding common shares in a share-for-share transaction. Upon its completion, it is expected Enexco shareholders will own an approximate 2.1% stake in Denison.
Enexco's uranium assets include a 30% interest in the Mann Lake exploration project and a 20% interest in the Bachman Lake Joint Venture.
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The former is an exploratory joint venture between Cameco Corp (with a 52.5% stake), Enexco (30%), and AREVA Resources Canada (17.5%).
Meanwhile, the Bachman Lake project is operated by Denison with an 80% controlling interest. It is one of Denison's highest priority uranium exploratory projects.
"Denison continues to focus on becoming the preeminent exploration company in the Athabasca Basin, and we believe that the acquisition of IEC represents another logical step towards achieving that goal," said Denison chairman Lukas Lundin in a statement.
Denison currently owns 3.6 million shares in Enexco, an approximate 8.4% of total shares outstanding.