Alpha Minerals and Fission Uranium each own 50% of the Patterson Lake South (PLS) project in Northern Saskatchewan. PLS is the most exciting mineral discovery in recent times for its potential size, high grade, shallow depth and proximity to infrastructure.
Fission Uranium CEO Dev Randhawa has launched a takeover of Alpha to consolidate ownership at PLS 100%. This is a logical step towards an eventual outright sale of the deposit to a major, however in Mr. Randhawa's proposed plan Fission will be in control of the combined entity.
Mr. Randhawa claims to have the support of Alpha shareholders, which is likely true since his Fission Uranium has traded consistently higher volumes than Alpha, although they have both seen very heavy trading. It's true that Fission are the better promoters.
I have assembled a brief slide show to help investors in Alpha Minerals, who are still considering the takeover, to understand the difference in approach between the managers at Alpha and those at Fission.
1. Here's Garrett Ainsworth, VP of Exploration at Alpha Minerals, wearing his ISO compliant vest standing on the site of the PLS discovery hole talking seriously about the company's drill program.
2. On the same spot yesterday stood Fission Uranium president Ross "McElmoney" McElroy sandwiched between jubilant Fission investors.
3. Alpha Minerals CEO Ben Ainsworth is a gentle giant in the Canadian mineral exploration business. He earned an honours degree in geology from Oxford in 1962 and has over 50 years of industry experience. Ainsworth was recently a senior executive at Hathor Exploration, the last Saskatchewan uranium explorer to be taken out by a major.
4. While Fission CEO Dev Randhawa didn't make it to Oxford, he did sell a hefty portion of the predecessor Fission for $70 million to Denison earlier this year. Mr. Randhawa is known for constant communication, and for his love of the good times...
5. Finally, I wanted to show Alpha's chairman Mike Gunning, who was CEO of Hathor Exploration when it was sold to Rio Tinto for ~$650 million in 2011. Mr. Gunning received the Colin Spence Award for Excellence in Global Mineral Exploration for his efforts at Hathor. I believe Gunning should be the CEO of the combined company, but we haven't heard a peep out of Mike lately...
Nothing against Fission, but Alpha's Garrett Ainsworth found PLS. Also, both Alpha's CEO Ben Ainsworth and Chairman Mike Gunning were senior executives at Hathor which just sold for over $650 million. I do not understand why Alpha shareholders would want to relinquish control to Fission.
I'm not sure it matters who controls PLS, but I suspect managers from a large miner would prefer the more reserved team at Alpha. But when it comes time to celebrate the deal, Fission's the one!
Flashback: Proposed management structure for the combined Fission Uranium and Alpha Minerals
These are my opinions and not to be construed as professional or investment advice of any kind.
What do you think?
Don’t own either stock, but I think the pictures tell the story!
I’m glad your disclaimer notes that your not offering professional advice. An article like this strips away any pretence of professional objectivity and presents you in a very poor light. There’s no doubt that you can find business and casual shots of both teams – the fact you’ve chosen to shot business from one side and casual from the other is an obvious attempt to downplay Fission. I assume you hold Alpha shares and not Fission. I have to assume that as you didn’t bother making it clear in your disclaimer.
I’m a shareholder of both companies and have followed the PLS story from an early stage. Both teams were involved in the discovery and both have had their time as Operator at PLS. Currently it’s Fission and has been since early 2012 so try and get your facts right. Your most amusing comment was that it doesn’t matter who runs PLS and that a major would prefer a ‘reserved team’. Reserved or dynamic – who cares? This is about getting the most money for us shareholders and considering the trouble that Rio got into after buying Hathor, I’m not sure Gunning can deliver.
I do own Alpha shares. I mentioned the position in the Flashback post linked above and in several earlier articles about Alpha and Fission. I appreciate your comment. Both are tremendous companies. I’m just sticking up for the underdog and having some fun. Thanks for your comment.
I’d like to see a 5 man board.. Dev, McElroy, Ainsworth Sr, Gunning
For the 5th, maybe an independent.. Stanyer? Estergaard?