VANCOUVER – Hathor Exploration Limited (TSX:HAT) says its Roughrider uranium deposit in Saskatchewan could be worth between $769 million and $1.5 billion – far above a hostile bid from uranium giant Cameco.
The Vancouver-based junior miner said Tuesday the prized deposit’s value before taxes is part of a preliminary economic assessment that assumes a range of possible scenarios on commodity prices, currency values and other factors.
However, Cameco Corp. (TSX:CCO), which is making a $520-million hostile takeover bid for Hathor, said it believes Hathor is using unrealistic assumptions in valuating the Roughrider project.
“Based on our initial review of the summary results of the (preliminary assessment), we do not see any new information that would lead us to change our view on Hathor, or the premium value we are offering to its shareholders,” Cameco CEO Tim Gitzel said.
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Cameco is offering $3.75 cash per share of the Vancouver-based company – 45 per cent above the pre-announcement market price of $2.67 – but Hathor’s stock has consistently traded above the bid.
Hathor shares were at $4.13 at mid-afternoon Tuesday, up three cents from the previous close.
Hathor has rejected the Cameco bid as too low and “opportunistic” and has urged shareholders to wait until the company’s board has reviewed the offer. Some analysts expect a possible bidding war for Hathor or a sweeter bid from Cameco.
Earlier Tuesday, Hathor issued a summary of benchmark estimates that could be used to determine whether the Roughrider deposit would be worth developimg. It uses various assumptions, including the potential value of uranium, currency rates and the impact of inflation to calculate net present value estimates.
A middle-of-the-road pre-tax estimate, using US$70 per pound for the price of uranium oxide, would value the deposit at $1 billion using a seven per cent discount rate over an 11-year mine life and various other assumptions.
Hathor’s estimate pegs Roughrider’s value as low as C$769 million if uranium oxide sells for an average of US$60 per pound or as high as C$1.5 billion if the average price is US$90 per pound.
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