Australian Strategic Minerals to be acquired by Energy Fuels in $447m deal
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The news: Rare earths producer Australian Strategic Materials (ASM) has entered a scheme of implementation to be acquired by New York-listed Energy Fuels to form what is touted as the largest fully integrated rare earth mine-to-metal and alloy producer outside China.
The deal gives ASM an implied enterprise value of about $447 million based on Energy Fuels' 15-day volume weighted average share price at close on 16 January. The pro-forma merged group would have an enterprise value of $8.1 billion.
The number: ASM shareholders will receive 0.53 Energy Fuels shares, which represents an implied equity value of $1.47 per ASM share. An unfranked special dividend of 13 cents per ASM share would also be paid.
The implied $1.60 of value per ASM share is a 121% premium on ASM’s last close price of 72.5 cents per share on 20 January. At 11:26am AEDT, shares in ASM had lifted 120% to $1.60.
ASM option holders would also receive 50 cents per share under a separate but concurrent scheme.
Shares in Energy Fuels on the New York Stock Exchange had slipped -0.98% to USD23.52 ($34.94) in extended trading. Energy Fuels is also listed on the Toronto Stock Exchange.
The context: The deal will focus on developing a Western focused supply chain for heavy and light rare earths. ASM has mining operations in New South Wales' Dubbo and a processing facility in South Korea, while Energy Fuels has plans to expand rare earth production at its White Mesa Mill in Utah.
ASM also has rare earth mining operations in Dubbo, while Energy Fuels has a pipeline of projects in Victoria as well as in Madagascar and Brazil.
The two companies have flagged that the deal is aligned with the objectives of the US-Australian Critical Minerals Framework.
What they said: “This proposed combination delivers a significant premium for ASM shareholders and ensures our shareholders retain the opportunity to participate in the substantial upside of a larger, better capitalised critical minerals business,” ASM managing director and CEO Rowena Smith said.
“We are pleased to recommend this transaction not only for the value it delivers but it accelerates the execution of our mine to metals strategy in a way that unlocks greater scale, de-risks delivery and positions us to capture the full potential of our rare earths opportunity.”
The sources: ASX, ASX, Energy Fuels media release
