Top Korean utility buys into uranium miner Denison

South Korea's state-owned utility company KEPCO has bought a major stake in Toronto's Denison Mines, and intends to buy African uranium mining assets within the year.

RENO, NV - 

Korean Electrical Power Corp (KEPCO) announced Sunday that it has acquired 17% of Canadian uranium miner Denison Mines in order to secure a stable source of fuel for its nuclear power plants.

KEPCO said it bought the stake for US$68 million. As reported on June 24th by Mineweb, KEPCO agreed to buy 58 million shares of Denison at an issue price of Cdn$1.13 per share.

The stake allows KEPCO to buy 300 tons of uranium per year or roughly eight percent of South Korea's annual uranium consumption from Dennison between 2010-2015. Denison mines 1,000 tons of uranium annually. South Korea imports 4,000 tons of uranium annually.

KEPCO also says it will retain the right to purchase Denison uranium beyond 2016 unless its interest in the Canadian miner fails below 10%. South Korea's uranium consumption is expected to increase by half to 6,000 tonnes annually by 2016.

The Korean utility said it also intends to acquire one or two uranium mining project in Africa within the year. In a statement, KEPCO President and CEO said, "2009 is the best time for M&A in natural resources development before the world economic recovery actually happens."

The company said it will also participate in the management of Denison through the contract. Kepco will be given a seat on the Denison board of directors.

Toronto-based Denison has mining assets in the Athabasca Basin of Saskatchewan, Canada and in Colorado, Utah and Arizona in the U.S. 

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