Base Resources Limited - Proposed combination with Energy Fuels to create global critical minerals business
AIM and Media Release
Proposed combination with
--Base Resources andEnergy Fuels have reached a binding agreement forEnergy Fuels , a US-based uranium and critical minerals producer, to acquire 100% of the issued shares inBase Resources by way of scheme of arrangement. --Base Resources shareholders to receive 0.0260Energy Fuels common shares plus an unfranked special dividend ofA$0.065 for eachBase Resources share held, equating to total consideration of approximatelyA$0.302 per share. -- Represents a premium toBase Resources' last closing price of 188%, and a premium to the 20-day VWAP ofBase Resources shares of 173%. --Base Resources' Board unanimously recommends shareholders vote in favour of the Scheme and each Director owningBase Resources shares intends to vote all those shares in favour of the Scheme1. -- Voting intention statements from each ofBase Resources' two major shareholders (respectively owning 26.5% and 24.8% of the shares on issue) received confirming that they each intend to vote in favour of the Scheme1. -- Transaction will establish a global leader in the critical minerals sector with a focus on rare earth elements, uranium and heavy mineral sands production and a clear strategic development pathway. -- Transaction will also create a platform for the funding and development ofBase Resources' world-classToliara Project inMadagascar , with future monazite production from the project to be processed atEnergy Fuels' operating White Mesa mill inthe United States . --Base Resources' proven leadership team to be retained and continue to oversee the development, and operation of theToliara Project and the completion of operations and closure of Kwale Operations, as well as the progression of other mineral sands and rare earths interests of the combined group.
[Note (1): In each case, in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of shareholders.]
Under the terms of the Transaction,
The Transaction Consideration implies an offer price of
-- 188% toBase Resources' last closing price ofA$0.105 per share on 19April 2024 . -- 173% toBase Resources' 20-day volume weighted average price (VWAP) to19 April 2024 ofA$0.111 per share.
Following implementation of the Transaction,
The Base Resources Board unanimously recommends that shareholders vote in favour of the Transaction in the absence of a Superior Proposal (as defined in the SID) and subject to the Independent Expert concluding, and continuing to conclude, that the Transaction is in the best interests of
[Notes:
(2):
Payment of the special dividend is conditional on the Scheme becoming legally effective.
(3):
Based on
Potential Benefits to Base Shareholders
In addition to the significant premium offered, the Transaction provides several other potential benefits to
-- Continued exposure toBase Resources' world-classToliara Project inMadagascar . -- A strong platform for the funding and development of theToliara Project , through the significantly greater market capitalisation, trading liquidity, market profile and funding capacity of the combined group. -- Exposure to the opportunity to add significant value to the monazite produced at theToliara Project by capturing a greater share of the rare earth element (REE) value chain through processing atEnergy Fuels' operating White Mesa mill inUtah (Mill) into separated rare earth oxides (REOs). This opportunity remains subject toEnergy Fuels completing commissioning of Phase 1 of its REE separation facility at the Mill, and then arranging funding for and making a development decision on Phases 2 and 3 of this facility. -- Enhanced opportunity to secure strategic, low-costUnited States Government funding support for the development of theToliara Project , as well as the Phase 2 and 3 expansions of the REO production capacity at the Mill. -- Increased commodity diversification via exposure toEnergy Fuels' uranium business, with the White Mesa mill being the only operating conventional uranium mill, andEnergy Fuels currently being the largest producer of yellowcake, inthe United States . -- Continued exposure toBase Resources' proven leadership team, who will continue to oversee the development and operation of theToliara Project and the completion of operations and closure of Kwale Operations, as well as enhanceEnergy Fuels' teams on the progression of other mineral sands and rare earths interests of the combined group. -- A combined group with multiple potential value drivers (REE, uranium, mineral sands) providing risk diversification and multiple directions for strategic growth, including further down the REE value chain.
Managing Director of Base Resources , Tim Carstens , said:
"This Transaction, which is the culmination of 12 months of discussions between
Key Conditions and Terms
In summary, conditions for implementation of the Scheme include:
--Base Resources shareholder approval by the required majorities. -- the Independent Expert concluding (and continuing to conclude) that the Transaction is in the best interests ofBase Resources shareholders. -- approval byAustralia's Foreign Investment Review Board . -- approval of theFederal Court of Australia . -- no material adverse change and no prescribed occurrences in relation to eitherEnergy Fuels orBase Resources . -- other regulatory approvals, including necessary NYSE and TSX listing approvals and aU.S. Securities Act exemption for the Share Consideration, and approvals of theCompetition Authority of Kenya and Malagasy Competition Council. -- other customary conditions.
The SID also contains customary deal protections and exclusivity terms in favour of
The SID includes certain circumstances in which a break fee of
Recognising the significance of the Transaction to
Indicative Timetable, Next Steps and Attachments
As outlined above, the Scheme is subject to several conditions, including approval of
If the Transaction is approved by
Further information in relation to the Transaction, its rationale and
Investor Briefings
Webcast and teleconference -
Date
: Monday,
Time:
Webcast URL: https://registrations.events/direct/OCP7022547013
Teleconference pre-registration URL: https://webcast.openbriefing.com/bse-mu-2024-aus/
Webcast and teleconference -
Date
: Monday,
Time:
Webcast URL: https://registrations.events/direct/OCP5249348
Teleconference pre-registration URL: https://webcast.openbriefing.com/bse-mu-2024-uk/
Advisers
ENDS.
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the UK MAR) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For further information contact:
Australian Media RelationsUK Media RelationsMorrow Sodali Tavistock Communications Cameron Gilenko andMichael Weir Jos Simson andGareth Tredway Tel: +61 8 6160 4900 Tel: +44 207 920 3150
This release has been authorised by the Board of
About
About
In addition to the above production facilities,
The primary trading market for
BASE RESOURCES PRINCIPAL & REGISTERED OFFICE
Level 3,
Email: info@baseresources.com.au
Phone: +61 8 9413 7400
Fax: +61 8 9322 8912
BASE RESOURCES NOMINATED ADVISER & JOINT BROKER
Phone: +44 20 7523 8000
BASE RESOURCES JOINT BROKER
Berenberg
Phone: +44 20 3207 7800
Investor Presentation Scheme Implementation Deed