Rio Tinto upped its bid for Hathor Exploration to CAD 4.70 (USD 4.52) a share, a four percent premium to Cameco's latest bid. Valuing Hathor at around CAD 654 million, the bid would remain open until 30 November and that the target's board had reaffirmed its support for the bid, said the miner. Rio is a 49 percent stakeholder in Ivanhoe Mines and is largely expected to buy out the majority stakeholder of the Oyu Tolgoi project.

Rio said the lock-up agreement it entered into with Hathor's board as part of its earlier offer remains in effect. It reportedly owns 5.7 percent of Hathor's shares.

New York-based Hallgarten & Company mining strategist Chris Ecclestone said he believed Cameco should back down, and avoid the risk of “being suckered into overbidding.” He also said Cameco's initial hostile offer represented “full and fair value” for Hathor's shareholders, and that it would be unwise to continue bidding and could lose credibility.

Announcing its first bid, Cameco said it decided to go hostile with the CAD 520 million offer after Hathor's board rejected it. The uranium later producer questioned Hathor's preliminary economic assessment of CAD 567 million capital expenditure estimate for a five-million-pound-a-year mine at Roughrider, which the junior announced on 13 September. The firm's revised offer expired just after midnight on 29 November.

The spot price for uranium jumped nearly 10 percent last week to reach USD 55 a pound, before slipping to USD 52.50 a pound this week. The nuclear fuel had been selling for up to USD 73 a pound, before the Fukishima disaster caused the commodity's prices to head south. Ecclestone said uranium equities were still “dirt cheap.”

Rio wants ownership to get a foot in the door of Saskatchewan's Athabasca basin, which produces around one-fifth of the world's uranium supplies.