With its eye on the uranium sector, Rio Tinto made an offer to acquire Hathor Exploration Ltd. for C$4.15/share in cash per common share, a deal valued at C$578 million. The Rio Tinto upped the ante 11% over Cameco’s unsolicited offer of C$3.75/common share and a premium of 55.4% to Hathor’s closing share price of C$2.67 on the Toronto Stock Exchange (TSX) on August 25, 2011.
“The medium and long-term outlook for the uranium market is positive, with uranium assuming a significant role in the world’s primary energy needs,” said Rio Tinto Energy Chief Executive Doug Ritchie. “This acquisition will allow us to build on the platform successfully laid out by Hathor and we will continue to draw on their expertise and commitment going forward. Canada is a country crucial to our business and growth plans and a location where Rio Tinto has a track record of delivering on major development projects to the benefit of the local community.”
Rio Tinto plans to invest in the primary uranium producing regions of the world to develop long-life, low-cost operations. The Hathor acquisition, the company believes, provides a quality opportunity to expand the Rio Tinto presence in the Athabasca Basin which currently provides approximately 20% of global uranium output.
Rio Tinto said its expertise in exploration, innovative mining techniques, technology and commitment to sustainable development will complement and build upon the strong technical foundation established by Hathor at Roughrider—an emerging significant high-grade deposit. The company intends to accelerate the investigation and assessment of the exploration properties to unlock their full potential, consistent with its global safety and community standards.