Uranium developer Lotus Resources has signed a scheme implementation deed (SID) to merge with minerals exploration company A-Cap Energy via a scheme of arrangement, to create an Africa-focused uranium player.
According to the SID, Lotus will acquire 100% shares of A-Cap. In exchange, A-Cap shareholders would receive one new Lotus share for every 3.54 shares held in the company. This implies a value of A$0.052 a share for A-Cap shares.
In the absence of a superior proposal, A-Cap’s board has unanimously recommended that shareholders accept Lotus Resources’ offer. This is subject to an independent expert concluding that the offer is in the best interest of A-Cap shareholders.
The merged group will combine the production-ready Kayelekera Uranium Project in Malawi with the future Letlhakane Uranium Project in Botswana.
Lotus managing director Keith Bowes said: “Combining the uranium assets of Lotus and A-Cap creates a dedicated African uranium vehicle that meets the needs of the growing uranium market. Lotus’s resource base will increase almost five-fold, from 51.1 million pounds (mlb) to 241.5mlb (100% basis) while A-Cap shareholders will gain exposure to a production-ready asset in Kayelekera.”
Upon share scheme implementation, Lotus shareholders will own about 79% of the merged group. A-Cap shareholders will hold around 21% of the merged entity.
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A-Cap deputy chairperson Paul Ingram said: “To A-Cap Energy shareholders, this merger provides immediate value realisation at a premium.
“It also provides the opportunity to become a shareholder in Lotus, a larger, more liquid vehicle, while retaining meaningful exposure to Letlhakane and significant leverage to the global uranium thematic. Becoming a part of a larger group significantly reduces development, funding and execution risk.”