ASX- and Aim-listed Base Resources and US-based uranium and critical minerals producer Energy Fuels have reached a binding agreement for Energy Fuels to acquire 100% of the issued shares in Base Resources by way of a scheme of arrangement.

Base shareholders are to receive 0.0260 Energy Fuels common shares plus an unfranked special dividend of A$0.065 for each Base share held, equating to total consideration of about A$0.302 a share.

Following implementation of the transaction, Base shareholders will hold about 16.4% of the combined group, which will have a pro forma market capitalisation of about $1.14-million.

Base's board has unanimously recommended that shareholders vote in favour of the scheme.

Base says the transaction will 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 adds that the transaction will also create a platform for the funding and development of Base's Toliara project in Madagascar, with future monazite production from the project to be processed at Energy Fuels’ operating White Mesa mill, in Utah, in the US. 

Energy Fuels points out that, once in production, the monazite from Toliara will provide a large portion of the raw materials needed for Energy Fuels' rapidly expanding rare earth element (REE) oxide production facility at the White Mesa mill.

It says that the addition of a low-cost source of REE raw materials to Energy Fuels' US REE production infrastructure, along with a sustainable low-cost source of uranium production, is expected to be highly accretive to its shareholders on a net asset value per share basis, with potential to unlock significant further upside.

Base informs that its proven leadership team will be retained and continue to oversee the development and operation of the Toliara project and the completion of operations and closure of its Kwale operations, in Kenya, as well as the progression of other mineral sands and rare earths interests of the combined group.

“This transaction, which is the culmination of 12 months of discussions between Base and Energy Fuels, reflects the exceptional quality of the Toliara project and the efforts of the Base team over the past several years to advance the project towards construction readiness.

“The combined group will have the financial and technical capability to not only build Toliara into one of the best critical mineral projects in the world, but also to develop an integrated value chain for the rare earth elements that are essential to the global energy transition,” says Base MD Tim Carstens.

“[Base] shareholders will receive both a compelling and immediate premium and the opportunity to further participate in the market recognition and development of a company with a unique diversified position in the critical minerals landscape,” he adds.

Energy Fuels president and CEO Mark Chalmers comments that the acquisition of Base Resources and the Toliara project represents "a monumental leap forward" for Energy Fuels, as it continues to execute on a truly REE, uranium and critical mineral combined strategy.

"For the past four-plus years, Energy Fuels has innovated a new way to produce critical minerals, that we believe is more cost competitive than traditional approaches, by leveraging our uranium processing expertise and infrastructure to develop a secure, US-centric REE oxide supply chain.

"At the same time, we plan to maintain our leadership and profitability in our core US-based uranium business without diminishing our uranium capabilities or uranium growth potential in any way. In fact, Toliara will provide a steady, low-cost source of uranium for the company over the life of the project," he says.

Chalmers points out that Energy Fuels plans to supply REE oxides to US, European and Asian electric vehicle, wind energy and other clean energy manufacturers, along with emerging commercial REE metal-making, alloying and magnet-making facilities now under development in the US.

"We also plan to be a reliable supplier to the US defence industry, which could include offtake for other REE oxides, besides the 'magnet' oxides, contained in monazite. This acquisition, along with the [White Mesa] mill's current and planned REE separation capability, will go a long way in establishing a 'western' REE supply chain.

"Energy Fuels is also in high-level discussions with numerous US government agencies and offices that support critical mineral projects, and we look forward to advancing these discussions as we continue to build our REE business," he notes.