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MT Newswires Canada Overnight Stocks To Watch: Denison Mines and UEX Corporation; Enerplus and Journey Energy Inc

MT Newswires ·  {{timeTz}}

08:32 PM EDT, 07/28/2022 (MT Newswires) -- Uranium Energy Corp. (NYSE American: UEC) overnight Thursday announced that it has received a notice from UEX Corporation that Denison Mines Corp. (DML.TO) has made an acquisition proposal for all of the issued and outstanding shares of UEX pursuant to a plan of arrangement. UEX has further advised UEC that the board of directors of UEX has determined that the Denison Proposal constitutes a "Superior Proposal" as defined in the arrangement agreement dated June 13, 2022, as amended June 23, 2022, among UEX, UEC and the UEC 2022 Acquisition Corp. and that UEX intends (subject to UEC's right to match the Denison Proposal) to enter into an agreement with Denison to implement the Denison Proposal.

Under the Arrangement Agreement, UEC has the right, for a period of five business days from receipt of UEX's notice, to offer to amend the terms of the Arrangement Agreement. In the event that UEC elects not to match and if UEX terminates the Arrangement Agreement in order to enter into an agreement with Denison, then UEX is required to pay to UEC a termination fee in the amount of US$8.25 million.

Amir Adnani, President and CEO, in a statement said: "UEC has consistently been disciplined and focused on delivering accretive transactions for our shareholders as exhibited by our successful M&A track record. While the competing offer for UEX validates the merits of this acquisition, since announcing the transaction, there has been significant market deterioration in the sector and this has created a broader set of growth opportunities that would be highly accretive and strategic in nature. We continue to be in the driver's seat with our acquisition of UEX, however, we have made no determination as to whether we will choose to match the competing offer. UEC will do a careful analysis to determine whether this or other opportunities we are considering provide the most compelling value for our shareholders."

Meanwhile Enerplus Corporation (TSX and NYSE: ERF) has entered into a definitive agreement to sell certain Canadian assets located in Alberta to Journey Energy Inc. (JOY.TO) for total consideration of C$140 million (US$109 million), prior to closing adjustments. Under the terms of the agreement, the total consideration comprises cash of C$81 million, 3.0 million common shares in Journey valued at C$14 million based on its last five trading days volume weighted average share price, and a C$45 million monthly amortizing, interest-bearing loan which Enerplus will provide to Journey that is secured by certain of the assets and which must be repaid in full by October 31, 2024.

The assets include the company's Ante Creek and Medicine Hat operations along with its broad interests in the West Five and West Six areas of Alberta. Production from the Assets is approximately 3,400 BOE per day (60% crude oil) on a net after deduction of royalty basis (4,400 BOE per day before deduction of royalties). The Assets include over 400 net wells.

Enerplus said it is "continuing to advance opportunities" to divest its remaining Canadian assets in Alberta and Saskatchewan with associated production of approximately 3,000 BOE per day (99% crude oil) on a net after deduction of royalty basis (4,000 BOE per day before deduction of royalties). Proceeds from the transaction are expected to be directed to debt reduction and enhancing Enerplus' return of capital to shareholders. Enerplus will provide an update on its return of capital plans with the company's second quarter 2022 results to be announced on August 4, 2022. Updated guidance will also be provided with the second quarter results announcement. The transaction is expected to close at the end of the third quarter of 2022, subject to customary closing conditions.

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