Paladin Energy Limited (ASX: PDN) (OTCQX: PALAF) and Fission Uranium Corp. (TSX: FCU) (OTCQX: FCUUF) (FSE:2FU) are pleased to announce they have entered into a definitive arrangement agreement, pursuant to which Paladin will acquire 100% of the issued and outstanding shares of Fission by way of a court approved plan of arrangement under the Canada Business Corporation Act.

Transactions Highlights

• Fission shareholders will receive 0.1076 fully paid shares of Paladin for each Fission share held at the closing of the Transaction.
• The Offer Consideration represents:
  • an implied value of C$1.30 per Fission Share¹;
  • an implied equity value of C$1,140 million²;
  • a 25.8% premium to the closing price of the Fission Shares on the TSX (C$1.03) on 21 June 2024; and
  • a 30.0% premium to the 20-day Volume Weighted Average Price of the Fission Shares on 21 June 2024³.
• Upon completion of the Transaction, Fission shareholders will own 24.0% of Paladin⁴, which will have a pro-forma market capitalisation of approximately US$3.5 billion⁵.
• Paladin has applied for listing of the Paladin Shares on the Toronto Stock Exchange concurrent with completion of the Transaction, such that Fission shareholders will receive TSX-listed Paladin Shares.
• Fission’s Board of Directors, following the unanimous recommendation by its special committee of independent directors, and in consultation with Fission’s financial and legal advisors, recommends that Fission shareholders vote in favour of the Transaction.
• Cantor Fitzgerald has provided an opinion to the Special Committee to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the Offer Consideration is fair, from a financial point of view to the Fission shareholders. SCP Resource Finance has provided an opinion to the Board of Directors of Fission, stating that as of the date of such opinion, based upon and subject to the assumptions, limitations and qualifications set forth therein, the Offer Consideration to be received by Fission shareholders under the Transaction is fair, from a financial point of view, to Fission shareholders.
• Directors and members of senior management of Fission holding 0.7% of the outstanding Fission Shares have entered into voting support arrangements with Paladin pursuant to which they have agreed to vote their Fission Shares in favour of the Transaction at the special meeting of shareholders to be called by Fission to approve the Transaction.
• The Transaction is targeted to close in the September 2024 quarter (subject to satisfaction of all conditions under the Agreement).

The combination of Paladin and Fission will create a clean energy leader and will deliver the following benefits to both Paladin and Fission shareholders:

• Enhanced project development pipeline.
• Multi-asset production expected by 2029.
• Diversified presence across leading uranium mining jurisdictions of Canada, Namibia and Australia.
• Increased exposure to highly attractive long term uranium fundamentals.
• Increased scale and global profile of Paladin with TSX listing.

The Transaction will also deliver several direct benefits to Fission shareholders:

• Attractive 30.0% premium to Fission’s 20-Day VWAP⁶ and the ability to participate in the upside of Paladin.
• Meaningful 24.0% ownership in a global, multi-asset uranium company with exposure to the producing Langer Heinrich Mine.
• Continued exposure to the Patterson Lake South project’s future operational profile and exploration upside.
• De-risk Fission’s PLS development funding, underpinned by LHM production and customer offtake contract book.
• Opportunity to retain TSX-listed shares in a leading ASX100 growth-focused uranium company providing increased trading liquidity and an enhanced capital markets presence.

Paladin CEO Ian Purdy commented:

“The acquisition of Fission, along with the successful restart of our Langer Heinrich Mine, is another step in our strategy to diversify and grow into a global uranium leader across the top uranium mining jurisdictions of Canada, Namibia and Australia.

Fission is a natural fit for our portfolio with the shallow high-grade PLS project located in Canada’s Athabasca Basin. The addition of PLS creates a leading Canadian development hub alongside Paladin’s Michelin project, with exploration upside across all Canadian properties.

Both sets of shareholders are expected to benefit from the increased scale of the enlarged company, with a combined Mineral Resource representing one of the largest amongst pure-play uranium companies globally and a substantially increased international capital markets exposure. The Transaction also de-risks the development of PLS for Fission shareholders, underpinned by LHM production and Paladin’s leading offtake contract book. Paladin will bring the required investment to PLS in order to advance it towards production.”

Fission President and CEO Ross McElroy commented:

“The combination of Fission and Paladin will create a world class diverse uranium producer, adding a class leading development project in a Tier 1 jurisdiction with the ability to expand production and cash flow profiles in the near term.  With commercial production at Langer Heinrich and further development milestones at PLS, this opportunity will create a diverse pureplay uranium company with current production and a deep pipeline of near and mid-term assets available to investors.

The culture and assets between Fission and Paladin are very complimentary.  Shareholders will have exposure to a producing asset with a long life of mine, located in a politically stable and globally significant uranium jurisdiction with a long history of uranium production, coupled with Fission’s advanced stage, large, near surface, high-grade Triple R deposit at its PLS project located in Canada’s renowned Athabasca Basin.

This arrangement significantly de-risks the mine-building financing at PLS, with the cash flow generation at Langer Heinrich and a strong balance sheet creating an opportunity to significantly fund the development of PLS through debt and internally generated cash flows with limited further equity dilution.”

Transaction Details

The Transaction will create a globally significant uranium company listed on the ASX and TSX with a robust portfolio of exploration, development and production assets.

Pursuant to the Agreement, Paladin will acquire all of the issued and outstanding Fission Shares by way of a court approved plan of arrangement under the Canada Business Corporations Act.

Under the terms of the Agreement, each Fission Share outstanding at the effective time of the Agreement will be exchanged for the Offer Consideration. The Offer Consideration represents an implied value of C$1.30 per Fission Share and an equity value of C$1,140 million (A$1,253 million) based on the closing price of the Paladin Shares on the ASX of A$13.24 (C$12.04) on 21 June 2024. The Offer Consideration represents a 25.8% premium to the closing price of the Fission Shares on the TSX of C$1.03 on 21 June 2024 and a 30.0% premium to the 20-day VWAP of the Fission Shares on 21 June 2024.

Upon completion of the Transaction, existing Paladin and Fission shareholders will own approximately 76.0% and 24.0% of the enlarged Paladin, respectively.

Paladin has applied to list the Paladin Shares on the TSX concurrent with closing of the Transaction. Paladin shareholder approval is not required for the Transaction.⁷

The Transaction requires the approval of (i) at least 66^2/3% of the votes cast by Fission shareholders voting as a single class at the Fission Meeting, (ii) at least 66^2/3% of the votes cast by Fission shareholders and optionholders voting together as a single class at the Fission Meeting, and (iii) a simple majority of the votes cast by Fission’s minority shareholders at the Fission Meeting.

The Transaction is also subject to closing conditions customary in transactions of this nature, including receipt of Investment Canada Act and Competition Act (Canada) clearance, British Columbia court approvals and applicable stock exchange approvals.

The Agreement also includes customary reciprocal deal protections, including fiduciary-out provisions, non-solicitation covenants and a right to match any superior proposals. A termination fee of C$40 million (A$44 million)⁸ is payable by Fission to Paladin if the Agreement is terminated in certain circumstances.

The Transaction is targeted to be completed in the September 2024 quarter, subject to satisfaction of all conditions under the Agreement.

Following completion of the Transaction, the Fission Shares will be de-listed from the TSX, the OTCQX and the Frankfurt Stock Exchange.

Full details of the Transaction will be included in a management information circular of Fission which is expected to be mailed to Fission shareholders in connection with the Fission Meeting on or around 23 July 2024. Copies of the Fission Circular and the Agreement will be available to access on SEDAR+ under Fission’s profile.

Strategic Rationale

1. World-class production and growth pipeline

• LHM recommenced production in March 2024 with a 17-year mine life and a nameplate capacity of 6Mlbs p.a. U₃O₈.⁹
• PLS hosts the shallow, high-grade Triple R deposit located in the Athabasca Basin in Saskatchewan, Canada.
• The PLS Feasibility Study (as defined below) highlighted the potential for a 10-year mine life with annual production of 9.1Mlbs p.a. U₃O₈.¹⁰
• PLS along with the producing LHM and Paladin’s Michelin project (which is at the preliminary economic assessment stage) deliver a quality growth pipeline with the ability to grow production into a structurally tight uranium market.

2. Creation of a leading Canadian development hub

• Creates a new, leading Canadian development hub with two uranium projects, PLS and Michelin.
• High quality multi-asset portfolio with exposure to Canada’s highly prospective Athabasca Basin with exploration upside across all properties.

3. Globally significant uranium resource

• Combined resource representing one of the largest amongst pure-play uranium companies with pro-forma U₃O₈ Mineral Resources of 544Mlbs and Ore Reserves of 157Mlbs.¹¹
• Diversified uranium portfolio across conventional open-pit and high-grade underground orebodies.

4. Enhanced exposure to highly attractive uranium market

• Multi-asset production expected by the end of the decade leveraged to strong future demand for nuclear energy driven by global decarbonisation.
• Anticipated global uranium supply shortage driven by under-investment over the last decade.

5. Increased international capital markets presence

• Further enhances Paladin’s position as the leading ASX100-listed pure-play uranium producer.
• Increased market capitalisation and dual listing on the TSX expected to attract a broader investor base and increased research coverage.
• Increased access to a highly institutionalised, international register and enhanced trading liquidity.

6. Shared commitment to a sustainable future

• Collective focus to help drive the global energy transition to a carbon-free, sustainable future.
• Strong Indigenous and local community engagement across all operating regions.
• United corporate governance across environmental and social frameworks.
• Commitment to creating lasting value in the local economy.

Board of Directors’ Recommendations

Fission’s Board of Directors, following the unanimous recommendation by its Special Committee, and in consultation with Fission’s financial and legal advisors, recommends that Fission shareholders vote in favour of the Transaction.

Advisors

Paladin has engaged Macquarie Capital as financial advisor, Fasken Martineau DuMoulin LLP as Canadian legal advisor and Corrs Chambers Westgarth as Australian legal advisor.

Fission has engaged SCP Resource Finance as financial advisor and Blake, Cassels & Graydon LLP as legal advisor. Fission’s Special Committee has engaged Cantor Fitzgerald as financial advisor.

About Paladin

Paladin Energy Ltd is a globally significant independent uranium producer with a 75% ownership of the world-class long life Langer Heinrich Mine located in Namibia. Paladin also owns a portfolio of uranium exploration and development assets in Canada and Australia.  Paladin is committed to a best-practice ESG framework that ensures responsible, accountable and transparent management of the uranium resources Paladin mines – both now and in the future. Through its Langer Heinrich Mine, Paladin delivers reliable uranium supply to major nuclear utilities around the world, positioning itself as a meaningful contributor to global decarbonisation.

About Fission

Fission Uranium Corp. is an award-winning Canadian uranium project developer and 100% owner of the Patterson Lake South uranium property – a proposed high-grade uranium mine and mill in Canada’s Athabasca Basin region.