December 17, 2010 / 11:42 AM / 9 years ago

UPDATE 1-Paladin Energy to buy Fronteer Gold's uranium assets

* To pay 52.1 mln shares, valued at C$260 mln

* Fronteer to own 6.7 pct of Paladin on deal close

Dec 17 (Reuters) - Australia-based Paladin Energy Ltd PDN.TO (PDN.AX) agreed to buy the uranium assets of Canada’s Fronteer Gold Inc FRG.TO in an all-stock deal valued at about C$260 million ($258.7 million).

Under the terms, Fronteer Gold will receive 52.1 million Paladin shares listed on the Toronto Stock Exchange for the uranium assets owned by its unit Aurora Energy Resources Inc, Fronteer said in a statement.

The company will become the largest shareholder in Paladin on closing of the deal, with a 6.7 percent stake, expected in the first quarter of 2011.

Fronteer Gold, aiming to become a significant gold producer in Nevada, said the sale will allow it to focus on its Long Canyon and Northumberland project.

Aurora Energy holds uranium assets in the highly prospective Central Mineral Belt of Newfoundland and Labrador in Eastern Canada.

Shares of Fronteer Gold closed at C$11.14 on Thursday on the Toronto Stock Exchange, while those of Paladin closed at C$4.99. ($1=1.005 Canadian) (Reporting by Aftab Ahmed in Bangalore; Editing by Unnikrishnan Nair) (; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:

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