GoviEx Uranium (TSX-V:GXU, OTCQB:GVXXF) Inc. has announced that Denison Mines Corp (TSX:DML) has entered into a private agreement to sell 32,500,000 of the 65,144,021 common shares it holds in GoviEx in a single block to an already large existing institutional shareholder of the company in a transaction worth up to C$41.6 million.
The sale was at an attributed value of C$0.48 per common share together with warrants to acquire an additional 32,500,000 common shares of Goviex held by Denison at an exercise price of C$0.80 per share for a term of 18 months.
Following this single transaction, Denison will own approximately 6% of GoviEx's current issued share capital. David Cates, the CEO of Denison, will remain on the Board of GoviEx following the completion of this transaction.
READ: GoviEx releases positive results from a drill campaign at its Mutanga project in Zambia
In a statement, Govind Friedland, GoviEx's executive chairman commented: "This transaction announced today between two existing GoviEx shareholders demonstrates strong institutional demand and continued interest in the uranium sector and in GoviEx's equity. The second part of the transaction entitles the purchasing party to warrants exercisable at CAD 0.80, which is a positive sign of confidence in our management team and in the strength of our pipeline of uranium assets."
Denison's shareholding in GoviEx originated as part of a strategic transaction in 2016, in which GoviEx acquired Denison's wholly-owned subsidiary, Rockgate Capital Corp., which held all of Denison's Africa-based uranium interests in exchange for 56,050,450 shares of GoviEx and 22,420,180 common share purchase warrants.
GoviEx Uranium is a mineral resource company focused on the exploration and development of uranium properties in Africa.
The company's principal objective is to become a significant uranium producer through the continued exploration and development of its flagship mine-permitted Madaouela Project in Niger, its mine-permitted Mutanga Project in Zambia, and its multi-element Falea Project in Mali.
Contact the author at jon.hopkins@proactiveinvestors.com