Uranium developer Lotus Resources and minerals exploration company A-Cap Energy will merge as per a scheme of arrangement under which Lotus will acquire 100 per cent of the A-Cap shares on issue.
Both Lotus and A-Cap have headquarters located in Perth, Western Australia. Through the share scheme of arrangement, A-Cap shareholders will receive one new Lotus share for every 3.54 A-Cap shares held on the scheme record date. The transaction implies an offer price of approximately $0.0521 per A-Cap share.
Once the share scheme is implemented, Lotus shareholders will hold approximately 79 per cent of the merged group and A-Cap shareholders will hold the remaining amount.
The A-Cap board has unanimously supported the share scheme, in the absence of a superior proposal and subject to the independent expert concluding that the share scheme is in the best interest of A-Cap shareholders.
The merger is intended to create a leading African-focused uranium player with significant scale and resources by combining key uranium projects.
This includes combining Lotus’ Kayelekera uranium project located in Malawi, Africa, and is the fourth largest uranium asset globally by historical annual production currently on care and maintenance, with A-Cap’s Letlhakane uranium project located in Botswana and is one of the world’s largest undeveloped uranium deposits.
Lotus managing director Keith Bowes said that combining the uranium assets of Lotus and A-Cap will create a dedicated African uranium vehicle that meets the needs of the growing uranium market.
“Lotus’ resource base will increase almost five-fold, from 51.1 million pounds (Mlb) to 241.5Mlb (100 per cent basis), while A-Cap shareholders will gain exposure to a production ready asset in Kayelekera,” Bowes said.
A-Cap Energy chairman Jiandong He encouraged the company’s shareholders to support the merger.
“Through the A-Cap team, the Letlhakane project has reached a point whereby it is well set to become a significant global uranium supplier in an ever improving price market. A-Cap shareholders will benefit from the early production at Kayelekera while also drawing greater value from the longer term development of Letlhakane,” He said.