Shares of Base Resources Ltd (ASX:BSE), an Australian mineral sands mining company, surged over 100% on Monday following news of its acquisition by North American firm Energy Fuels Inc (TSX:EFR) (NYSE:UUUU) for an equity value of A$375 million ($241.7 million).
Energy Fuels announced a binding agreement to acquire all issued shares of Base Resources, offering 0.0260 Energy Fuels shares and A$0.065 in cash as a special dividend for each Base share. This deal, including the dividend, values Base at A$0.302 ($0.19384) per share, a substantial premium of nearly 200% over Base's previous closing price.
Although Base's Australian shares soared by 119% to A$0.230 ($0.150) post-announcement, they remained below the offer price. Base's directors have endorsed the deal and are urging shareholders to approve it.
Energy Fuels is primarily motivated by a desire to diversify its rare earth mineral supply. Base Resources owns the Toliara project in Madagascar, considered one of the premier mineral sands development projects globally.
Energy Fuels plans to process monazite from Toliara at its Mesa mill to produce rare earth element oxides. Additionally, Energy Fuels is in discussions with U.S. government agencies regarding financial support for critical mineral projects.
This acquisition aligns with efforts by the U.S. and its allies to secure rare earth supplies outside China, reducing dependence on Beijing, which currently dominates global rare earth production. Rare earth minerals are crucial in various industries, from consumer electronics to defense applications.
Paraphrasing text from "Investing" all rights reserved by the original author.
