Base Resources receives $375m takeover bid from Energy Fuels to create global critical minerals group

US-based critical minerals producer Energy Fuels has made a takeover bid for Australian company Base Resources (ASX: BSE) to create a billion-dollar global business with a focus on rare earth elements, uranium and mineral sands production.

Under the terms of the proposal, Base shareholders will receive 0.026 Energy Fuels shares for each Base share held plus $0.065 in cash via an unfranked special dividend payable by Base.

The consideration implies an offer price of $0.302 per share, which equates to a total equity value for Base of $375 million.

It represents a premium of 188% to Base’s last closing price of $0.105 on 19 April and a premium of 173% to the 20-day volume-weighted average price to 19 April of $0.111.

On completion of the transaction, Base shareholders will have approximately 16.4% equity in the combined group, which will have a pro-forma market capitalisation of US$1.14 billion.

Clear development pathway

The proposed takeover by Energy Fuels is expected to establish a global leader in the critical minerals sector with a focus on rare earth elements, uranium and heavy mineral sands production and a clear strategic development pathway.

It will create a platform for the funding and development of Base’s world-class Toliara project in Madagascar, with future monazite production from the project to be processed into separated rare earth oxides at Energy Fuels’ White Mesa mill in Utah.

White Mesa is the only operating conventional uranium mill in the US and Energy Fuels is currently the nation’s largest producer of yellowcake.

US funding

The takeover will also give Base an enhanced opportunity to secure strategic, low-cost US government funding support for the development of Toliara, as well as the Phase 2 and 3 expansions of rare earth oxide production capacity at the mill.

The opportunity remains subject to Energy Fuels completing commissioning of Phase 1 of the mill’s rare earth elements separation facility and the arrangement of funding for a development decision on Phase 2 and Phase 3.

Base managing director Tim Carstens said the takeover bid was the culmination of 12 months of discussions between both companies.

“This deal reflects the exceptional quality of the Toliara project and the efforts of [our] team over the past several years to advance the project towards construction readiness,” he said.

“The combined group will have the financial and technical capability to build Toliara into one of the best critical mineral projects in the world and develop an integrated value chain for rare earth elements that are essential to the global energy transition.”

‘Compelling’ premium

Mr Carstens said shareholders would receive a “compelling and immediate premium” and the opportunity to “participate in the market recognition and development of a company with a unique diversified position in the critical minerals landscape.”

The Base board has recommended shareholders vote in favour of the proposed transaction.