Regulatory authorities in Botswana have approved the acquisition of minerals exploration company A-Cap Energy by Lotus Resources.
Botswana’s Minister of Mines and Energy has issued no objection to the proposed shareholding change of the Letlhakane mining and prospecting licence. The country’s Competitions and Consumer Authority has also granted unconditional approval for the deal.
As per the scheme implementation deed (SID) announced in July this year, Lotus will acquire 100% of A-Cap.
The swap ratio is one share of Lotus for every 3.54 shares of A-Cap, with each A-Cap share valued at A$0.052 ($0.033).
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Upon the deal’s completion, Lotus shareholders will own 79% of the merged company and A-Cap shareholders will own the remaining 21% stake.
This merger will result in an Africa-focused uranium mining company through the combination of Kayelekera, a production-ready asset in Malawi; and Letlhakane, a future large-scale operation in Botswana.
The two projects are located in the same region, which can make them complementary and synergistic.
It will also result in the new company owning an estimated 241.5 million pounds (mlb) of triuranium octoxide (U₃O₈) in mineral resources.
Lotus managing director Keith Bowes said: “Lotus welcomes the positive response from the Botswanan regulators regarding the proposed transaction that aims to create a leading African-focused uranium player. This approval is a major step towards the schemes progressing to the next stage.
“We are excited to continue to work with the Botswana Government to bring the Letlhakane uranium project into production, ensuring the positive impacts of this project are felt at all levels in the country. We look forward to keeping the market updated as we move through the final stages of the scheme.
“We are fully funded to complete our previously announced Kayelekera project activities, and plan to implement the initial phase of Letlhakane project activities after implementing the transaction and receiving A-Cap’s remaining cash.”
Kayelekera is considered to be the fourth-largest uranium project in the world, with a historic annual production of 11mlb between 2009 and 2014. It was shut down due to sustained low prices of uranium.
Last year, Lotus released a definitive feasibility study, where it stated that the project has one of the lowest capital costs and can quickly begin production once a final investment decision is made for its restart.
Located in Botswana, the Letlhakane project is owned by A-Cap and secured a mining licence in 2016. The project is expected to produce up to 3.75mlb of uranium per annum over a mine life of 18 years.