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Fission Uranium Corp
Symbol FCU
Shares Issued 151,493,937
Close 2013-09-17 C$ 1.20
Market Cap C$ 181,792,724
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Fission, Alpha sign definitive deal for acquisition

2013-09-18 07:38 ET - News Release

Also News Release (C-AMW) Alpha Minerals Inc

Mr. Dev Randhawa of Fission reports

FISSION URANIUM AND ALPHA MINERALS EXECUTE DEFINITIVE AGREEMENT

Fission Uranium Corp. and Alpha Minerals Inc. have signed a definitive arrangement agreement to effect the previously announced transaction pursuant to which Fission will acquire Alpha and its primary asset, a 50-per-cent interest in the Patterson Lake South joint venture, the other 50 per cent of which is held by Fission. Under the terms of the arrangement agreement, Fission has agreed to offer shareholders of Alpha 5.725 shares of Fission and a cash payment of 0.001 cent for each Alpha share held by them. The offer represents a 14.5-per-cent premium to the unaffected share prices of Alpha and Fission on Aug. 23, 2013, the last trading day prior to the announcement of Fission's initial proposal to Alpha, and an 11-per-cent premium based on the closing prices on Aug. 30, 2013, the last trading day prior to the announcement of the proposed transaction.

Additionally, Alpha shareholders will receive all of the common shares of a new company (Alpha Spinco), which will be spun out from Alpha and hold all of Alpha's non-cash assets and obligations other than Alpha's interest in the PLS joint venture. Similarly, the current shareholders of Fission will receive all of the common shares of a new company (Fission Spinco), which will be spun out from Fission and hold all of Fission's non-cash assets and obligations other than Fission's interest in the PLS joint venture and certain related assets. Under the terms of the arrangement agreement, each of Alpha Spinco and Fission Spinco will receive approximately $3-million in cash to finance future operations.

The board of directors of Alpha, following consultation with its financial and legal advisers, has accepted the recommendation of its special committee of independent directors and has approved the transaction. The directors of Alpha will recommend that Alpha security holders vote in favour of the transaction in the information circular to be mailed to Alpha security holders in respect of the meeting of Alpha security holders to be held to approve the transaction.

"We are very pleased to have reached an agreement with Alpha and will continue to focus on the highly prospective Patterson Lake South discovery. I would like to thank the legal teams, financial advisers and Alpha for their efforts in reaching this important milestone," said Dev Randhawa, chairman of Fission.

Ben Ainsworth, president and chief executive officer of Alpha, said:

"It has been a rewarding experience for Alpha's team to have contributed to the discovery and early development of what is currently the most exciting uranium exploration project in the world. We look forward to the continued success of Fission's work at Patterson Lake South, building further value for Alpha's shareholders as this exceptional deposit reveals its economic potential."

The directors and officers of each of Fission and Alpha, as well as certain significant shareholders, collectively holding 5,837,732 Fission shares and 3,136,016 Alpha shares, have entered into voting agreements with Fission under which they agree to vote in favour of the transaction. The voting agreements terminate automatically upon termination of the arrangement agreement. Subject to the other party's right to match, each of Fission and Alpha may terminate the arrangement agreement in favour of an unsolicited superior proposal upon payment of a $6-million break fee to the other party.

Transaction benefits

Both Fission and Alpha believe that the transaction will provide a number of substantial benefits to the shareholders of both companies, including the following:

  • The larger public float of a combined company should benefit both sets of shareholders by increasing liquidity.
  • Shareholders of Alpha and Fission will continue to have exposure to the non-core assets of each company through the creation of Alpha Spinco and Fission Spinco, each of which will hold approximately $3-million in cash.
  • Consolidation of 100 per cent of the PLS joint venture into one unified company, removing the current 50:50 ownership of the PLS joint venture, which will streamline decision making and allow for other efficiencies.

Transaction details

The transaction will take place by way of a plan of arrangement. Pursuant to the terms of the arrangement agreement, the completion of the transaction is conditional upon a number of items, including, without limitation, approval of the security holders of Alpha in respect of the transaction, and Fission in respect of the plan of arrangement, which creates Fission Spinco; conditional approval of the TSX Venture Exchange; approval of the Alberta Court of Queen's Bench; and receipt of all other necessary regulatory approvals.

Full details of the transaction will be included in information circulars to be filed with securities regulatory authorities and mailed to Alpha security holders in connection with the special meeting of Alpha security holders and Fission security holders in connection with the special meeting of Fission security holders. Alpha and Fission security holders are urged to read the respective information circulars once they become available as they will contain additional important information about the transaction.

Holders of Alpha's outstanding options will receive a number of replacement options adjusted by the exchange ratio for the transaction, each option entitling the holder, on exercise, to receive a common share of Fission, subject to an adjustment to the exercise price. Holders of Alpha warrants will be entitled, on exercise, to receive common shares of Fission, subject to an adjustment to the exercise price.

The transaction is expected to be completed in November, 2013, or such later date as the parties may agree. A special meeting of the security holders of Alpha and a special meeting of the security holders of Fission will be held at a time yet to be determined to approve the transaction.

Alpha has engaged Raymond James Ltd. as its financial adviser and Miller Thomson LLP as its legal adviser in respect of the transaction. The special committee of the board of directors of Alpha has engaged Gowling Lafleur Henderson LLP as its legal adviser. Fission has engaged Dundee Capital Markets as its financial adviser and Blake, Cassels & Graydon LLP as its legal adviser in respect of the transaction.

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