A$17.8 Million Recommended Takeover Offer by Paladin Energy Ltd for Fusion Resources Limited

A$17.8 Million Recommended Takeover Offer by Paladin Energy Ltd for Fusion Resources Limited

Paladin Energy Ltd and Fusion Resources Limited announce that Paladin intends to make an off-market scrip takeover offer for Australian and Toronto Stock Exchange listed minerals exploration company Fusion. This announcement was made after close of trading on the ASX.

The consideration under the Offer will comprise 1 fully paid ordinary Paladin share for every 6 fully paid ordinary Fusion shares, implying a price of A$0.365 per Fusion share based on today’s closing price of Paladin shares on the ASX of A$2.19.

The Offer values Fusion at approximately A$17.8 million and provides an attractive premium of 59% to the closing price for Fusion shares on the ASX on 1 December 2008 of A$0.23, being the last trading day prior to Fusion shares being placed in a trading halt. The Offer is subject to a number of conditions, which are set out in detail in Appendix 1 to this announcement.

Fusion’s directors have unanimously recommended that Fusion shareholders accept the Paladin offer, in the absence of a superior offer. They have also indicated that they intend to accept the Paladin offer in respect of their own shareholdings, in the absence of a superior offer.

Fusion is a minerals exploration company with 100% ownership of a number of uranium exploration projects in the Mt Isa region of Queensland and a portfolio of interests in copper / gold exploration projects in north Queensland. In addition, Fusion is expected to have a closing net cash balance (after allowing for all creditors, contingencies and accruals for any liabilities), of at least $14.0 million at the end of the Offer period.

Fusion’s most advanced project is the Valhalla North Uranium Project, which is located approximately 45 kilometres north of the Valhalla and Skal uranium projects owned by the Isa Uranium Joint Venture (“IUJV”) participants. Paladin has an effective 90.95% interest in the IUJV through its wholly owned subsidiary Valhalla Uranium Limited (“Valhalla Uranium”) and its 81.9% interest in Summit Resources Limited (“Summit”).

Fusion expects to announce a maiden JORC compliant resource for Valhalla North before the end of calendar year 2008 (it is a condition of the Offer that Fusion announces a JORC compliant resource of not less than 6Mlbs at a cut off grade of not less than 250ppm of uranium oxide (U3O8) prior to the Offer closing). Fusion’s other uranium projects near Mt Isa are the Andersons South uranium project and the Mary Kathleen South project.

The proposed acquisition represents an important addition to the portfolio of uranium exploration projects in the Mt Isa region currently controlled by Paladin, and another step forward in Paladin’s aim of developing a world-class uranium mining and processing operation in Queensland. Whilst this ultimately depends on a change in State Government policy in Queensland regarding uranium mining, Paladin plans to continue to progress exploration and appraisal of the Mt Isa projects to ensure readiness if and when this policy change occurs.

Fusion shareholders who accept the Offer will:

– retain the exploration upside associated with Fusion’s projects and continued exposure to potential changes in Australian State Government uranium mining policy;

– benefit from becoming shareholders in a uranium producing company, inherit a management team and board with the requisite skills and demonstrated ability to bring a uranium operation into production; and

– obtain increased liquidity of their investment through owning Paladin shares.

Fusion has also agreed to pay Paladin a break fee of approximately A$400,000 in certain circumstances, including a successful competing takeover proposal. A copy of the Takeover Bid Implementation Agreement can be accessed at the Company’s website at the following link http://www.paladinenergy.com.au/Portals/0/File/announcements_2008/08.12.02_Recommended_Takover_Offer_by_Paladin_for_Fusion.pdf.

Paladin’s financial adviser in respect of the proposed acquisition is Azure Capital and its legal adviser is Blakiston & Crabb. Fusion’s legal adviser is Hardy Bowen.

Indicative Timetable

Paladin’s Bidder’s Statement and Fusion’s Target Statement are both expected to be available in two to three weeks and despatched to Fusion shareholders as soon as possible thereafter. The Offer is expected to close in mid January, subject to any unforseen events.

Background Information – Paladin Energy Limited

Paladin is listed on both the Australian Securities Exchange and the Toronto Stock Exchange under the symbol “PDN” with a number of international subsidiary listings.

Paladin is a uranium resources company with a focus on the development and operation of uranium projects in Africa and Australia. During the past three years, Paladin has developed and commissioned the 100% owned Langer Heinrich uranium mine and processing plant in Namibia and begun construction of the Kayelekera uranium mine and processing plant in Malawi (with commissioning of this project expected in the first quarter of 2009). In addition, through its acquisition of 100% of Valhalla Uranium and 81.9% of Summit, Paladin has a majority interest in, and control of, a portfolio of uranium exploration projects in the Mt Isa region of Queensland (complementing its portfolio of existing Australian uranium exploration projects).

Further information regarding Paladin and its key assets can be found in Paladin’s latest Annual Report (a copy of which can be found on Paladin’s website, www.paladinenergy.com.au)

Share this post