Investing.com– Shares of Australian mineral sands miner Base Resources Ltd (ASX:BSE) more than doubled in value on Monday after it entered a deal to be bought by North American peer Energy Fuels (TSX:EFR) Inc (NYSE:UUUU) for an equity value of A$375 million ($241.7 million)
Energy Fuels said in an announcement that it had entered a binding agreement with Base Resources, under which it will acquire all issued shares of the latter for 0.0260 Energy Fuels shares for each share in Base, along with A$0.065 in cash as a special dividend.
That brings the total offer price under the deal, including the special dividend, to A$ 0.302 ($0.19384), representing a nearly 200% premium to Base Resources’ close on Friday.
Base’s Australian shares jumped 119% to A$0.230 ($0.150) after the deal, still trading below the offer price. Base’s directors agreed to the deal and recommended that shareholders vote in its favor.
Energy Fuels’ offer was motivated chiefly by an intent to diversify its supply of rare earth minerals. Base owns the heavy mineral sands Toliara project in Madagascar, which it calls one of the “best mineral sands development projects in the world.”
Monazite produced from Toliara will be processed at Energy Fuels’ Mesa mill into rare earth element oxides, the firm said in an announcement on Monday. The firm also said it is engaged in high-level discussions with U.S. government agencies for financial support for critical mineral projects.
The U.S. and its allies have moved to secure rare earth supplies outside China over the past few years, in an attempt to wean themselves from dependence on Beijing for the materials. China is currently the world\’s biggest producer of rare earths.
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Rare earth minerals play a vital role in developing modern technology, and are used in fields ranging from consumer electronics to defense applications.
