Basov reported in early 2022 that according to a statement released yesterday, Australian uranium mining company Deep Yellow and Vimy Resources have agreed to a merger by a scheme of arrangement, under which Deep Yellow will acquire 100% of the Vimy shares on issue. Vimy shareholders will receive 0.294 Deep Yellow shares for every Vimy share held on the scheme record date. The merger transaction implies 28.5¢2 per Vimy share representing a premium of 35.3% to the 30-day VWAP and a 18.8% premium to the closing Vimy share price on 25 March 2022.
Upon implementation of the scheme, Deep Yellow shareholders will hold 53% of the Merged Group and Vimy shareholders will hold 47%. The merged group is estimated to have a pro-forma market capitalisation of approximately $658 million, cash and equivalents of approximately $106 million and no balance sheet debt.
Importantly, according to a press-release, the merger is expected to create a new global uranium player with significant scale, one of the largest uranium mineral resource inventories globally (389 Mlb) and two advanced, world class assets in Tier-1 uranium mining jurisdictions.
In addition to numerous exploration assets, both companies have advanced development projects in their portfolios: Vimy Resources owns the Mulga Rock uranium project in Western Australia, for which the company has completed a definitive feasibility study; while Deep Yellow owns the advanced Tumas uranium project in Namibia, with a definitive feasibility study on track for completion by the end of 2022.
John Borshoff, Managing Director and CEO of Deep Yellow, commented: “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.”
He added that 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.
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