First Uranium Corporation (TSE:FIU) (PINK:FURAF) might see a somewhat drop in share price as the company was ordered by the South African National Nuclear Regulator to cease operations at the Mine Waste Solutions tailings recovery facility.
The company has complied with the new directive and already suspended operations, but they will be going through local courts to prove First Uranium materially complies with the requirements of the National Nuclear Regulator Act.
Currently, trading of FIU stock has been halted by Investment Industry Regulatory Organization of Canada to account for the effect of the news. The news on suspension of operations will clearly force some degree of panic on the market. It should also have an interesting outcome considering another significant development is still on the table.
FIU gapped up 50% last Friday after the company announced to have received an acquisition offer from AngloGold Ashanti (NYSE:AU). Africa’s largest gold miner will be buying the shares currently held by Village Main Reef Limited.
AngloGold offered to acquire 19.79% of First Uranium for roughly 63.8 cents per share, which makes up $30 million for 47 million shares. This valuation was sufficient to keep the share price afloat for a couple days.
Moreover, even with higher share price, the company still appears undervalued on the market. The current market cap of $140 million is far below the book value of the business, which tops $290 million. The company has $12 million in working capital and has been increasing quarterly revenues for the past year.
