Energy Fuels, a US-based critical minerals producer listed on the TSX under the symbol EFR, has recently launched a takeover bid for Australian company Base Resources, which is listed on the ASX as BSE. The aim of this proposed merger is to create a billion-dollar global business focused on rare earth elements, uranium, and mineral sands production.
According to the terms of the proposal, Base shareholders would receive 0.026 Energy Fuels shares for each Base share they hold, in addition to A$0.065 in cash through an unfranked special dividend to be paid by Base. This offer values each Base share at A$0.302, resulting in a total equity value for Base of A$375 million. It represents a premium of 188% over Base’s last closing price of A$0.105 on April 19th, and a premium of 173% over the 20-day volume-weighted average price up to April 19th of A$0.111.
Upon completion of the merger, Base shareholders would own approximately 16.4% of the combined entity, which would have a pro-forma market capitalization of US$1.14 billion.
The proposed takeover by Energy Fuels is expected to establish a global leader in the critical minerals industry, particularly in rare earth elements, uranium, and heavy mineral sands production. This merger provides a strategic development pathway for the combined group, including the funding and development of Base’s Toliara project in Madagascar. The future monazite production from the Toliara project would be processed into separated rare earth oxides at Energy Fuels’ White Mesa mill in Utah, the sole operational conventional uranium mill in the US.
Additionally, the merger would give Base an enhanced opportunity to secure strategic, low-cost US government funding support for the Toliara project and the expansion of rare earth oxide production capacity at the White Mesa mill. The completion of the transaction is subject to Energy Fuels completing the commissioning of Phase 1 of the rare earth elements separation facility at the mill, as well as arranging funding for Phase 2 and Phase 3 expansions.
The Managing Director of Base, Tim Carstens, expressed that the takeover bid was the result of extensive discussions between both companies over the past year. He highlighted the potential of the merged entity to develop Toliara into a leading critical mineral project and to establish an integrated value chain for rare earth elements essential for the global energy transition.
Carstens emphasized that shareholders would benefit from a “compelling and immediate premium” and have the opportunity to participate in the growth of a company with a diversified position in the critical minerals sector. The Base board has recommended that shareholders vote in favor of the proposed transaction.
