Australia Stock Exchange-listed Deep Yellow, which is developing the Tumas uranium Project in Namibia, has announced a N$7.1 billion proposed merger with Vimy Resources.
Under the terms of the Scheme, each shareholder of Vimy will receive 0.294 Deep Yellow ordinary fully paid shares for every ordinary fully paid Vimy share held on the Scheme record date.
If the Scheme is approved and implemented, Deep Yellow shareholders will hold 53% of the Merged Group and Vimy Shareholders will hold 47% of the Merged Group, in both cases on a fully diluted basis.
The merger is expected to create a new global uranium player with significant scale, cash resources of N$1.1 billion, one of the largest uranium mineral resource inventories globally of N$7.4 billion, and two advanced, world class assets in Tier-1 uranium mining jurisdictions.
“This Merger has the potential to be a significant value-creating opportunity for both Deep Yellow and Vimy Shareholders. The Merger combines two world class assets, both in Tier-1 mining jurisdictions, into a single group with scale and know-how. The expanded strong technical team of Deep Yellow, together with Vimy personnel, positions us well to bring both projects online when uranium prices support the generation of long-term, sustainable positive cash flows. This transaction also builds on the pipeline of exploration assets able to add growth organically and critically, creating a platform for additional value accretive acquisitions,” said John Borshoff, Managing Director and Chief Executive Officer of Deep Yellow.
A prefeasibility study last year of Deep Yellow’s Tumas project, estimated that it could produce 2.5-million pounds of uranium oxide over a mine life of 11.5-years, at an initial capital cost of N$1.4 billion.
“This Merger de-risks and underpins our path to development at Mulga Rock. The combined financial, processing and operating strengths of both companies will enable greater optimisation and the delivery of Mulga Rock, as well as an established exploration team that can unlock considerable value at Alligator River. The Merger provides Vimy Shareholders the opportunity to share in the expected significant benefits of being part of a larger, geographically diverse Merged Group, with the expertise to develop the full portfolio of assets in the near term,” Steven Michael, Managing Director and Chief Executive Officer of Vimy said.
Vimy’s uranium assets include the Mulga Rock and Alligator River projects, in Western Australia and the Northern Territory respectively.
Following the merger, the enlarged Deep Yellow will be led by Borshoff as CEO and MD, and Deep Yellow’s non executive chairperson Chris Salisbury.
