Australian mineral sands producer, Base Resources (ASX:BSA) and Energy Fuels, a leading uranium mining company in the United States, have forged an alliance through an acquisition deal.
Energy Fuels is set to acquire all issued shares of Base Resources under Australia’s Corporations Act.
As per the agreement, Base Resources shareholders will receive 0.0260 Energy Fuels common shares along with a dividend of A$0.065 per share, valuing Base Resources at A$375 million, representing a significant 188% premium over its recent stock price.
Upon completion of the acquisition, Base Resources shareholders will collectively hold a 16.4% stake in the newly combined entity.
The announcement has sparked a surge in Base shares, rallying as much as 119% in response to the news today.
The combined entity will leverage Base Resources’ experienced leadership team to oversee ongoing projects such as the Toliara Project in Madagascar, and to venture into new mineral sands and rare earths initiatives.
This merger aims to advance the company into a global leadership position in the critical minerals sector, enhancing market capitalisation, liquidity, and funding.
Additionally, Energy Fuels, strategic presence in the US market offers potential access to US Government funding for the Toliara Project and expansion endeavours at Energy Fuels’ White Mesa mill, in Southeast Utah, which already possesses rare earth element (REE) extraction capabilities.
Energy Fuels is committed to ramping up uranium production by mid-to-late 2024 and expanding operations, while maintaining White Mesa’s continued efforts in REE recovery, it also plans to enhance capacity indicate a promising trajectory toward neodymium and praseodymium (NdPr) oxide production.
Major board members are encouraging investors to vote in favour of the deal, given optimism and anticipation surrounding the growth opportunities that can derive from this deal.
BSA opened at 17.5 cents and was last traded at 23 cents as of 1pm AEST.