(MENAFN- ProactiveInvestors)
() will merge with the Colorado based and NASDAQ listed company Uranium Resources Inc.(NASDAQ:URRE).
The companies announced a binding agreement overnight to form a larger diversified uranium business.
Anatolia shareholders will be offered 0.06579 Uranium Resources shares for every 1 Anatolia share they own.
This values Anatolia at an offer price of A$0.115 per Anatolia share compared to last traded share price of $0.08.
After the merger which requires shareholders approval the combined market cap. of the group would be US$68.1 million (A$88.7 million).
Major Anatolia’s shareholders representing 25.6% of Anatolia’s shares on issue have provided their support for the merger: . (11.8%) Sprott Resources (7.3%) and RMB Resources (6.5%).
Uranium Resources’ largest shareholder Resource Capital Fund V L.P. (RCF) which has an interest of 23.5% has provided its statements of intention to vote in favour of the issue of the Scheme securities.
Anatolia is aiming to become a low-cost uranium producer in the near term from the Temrezli Project in central Turkey.
While Uranium Resources has more than 200000 acres of mineral holdings in Texas and New Mexico with two 800000 pound per annum ISR uranium processing plants and associated infrastructure in South Texas.
Combined cash of the two companies would be more than US$10.5 million (A$13.5 million) excluding restricted cash of US$3.9 million.
The merger will be via a binding Scheme Implementation Agreement under which Uranium Resources proposes to acquire all of the issued and outstanding securities in Anatolia through the issue of new securities in Uranium Resources.
Upon completion of the Merger Anatolia shareholders are expected to own 40.6% of the merged company and current Uranium Resources shareholders are expected to own 59.4%.
Key points of what the merged group would look like:
- Potential for near term uranium production from the high-grade Temrezli Project in central Turkey;
- Two 800000 lb pa ISR uranium processing plants and associated infrastructure in South Texas;
- Significant Mineral Resource base at the high grade Temrezli Project including: 2.008M Tonnes at 1378 ppm U3O8 for 6.1M lb U3O8 (Measured); 2.178M Tonnes at 1080 ppm U3O8 for 5.2M lb U3O8 (Indicated); 1.020M Tonnes at 888 ppm U3O8 for 2.0M lb U3O8 (Inferred)
- Exploration ground of approximately 17000 acres in South Texas 195000 acres in New Mexico and 45000 acres in central Turkey;
- Combined cash of more than US$10.5 million (A$13.5 million) excluding restricted cash of US$3.9 million;
- Quotation on the NASDAQ Stock Market and a proposed secondary listing on the ASX with a combined market capitalisation of approximately US$68.1 million (A$88.7 million);
- A Nuclear Regulatory Commission (NRC) licence to produce up to 3 million lb pa on certain properties in New Mexico; and
- A strong global institutional share register with support from major shareholders of both Uranium Resources and
Anatolia.
Anatolia’s managing director and CEO Paul Cronin said:
“The Merger with Uranium Resources provides an excellent solution to Anatolia’s current objectives to advance Temrezli into production as quickly and efficiently as possible and brings with it the possibility of greatly reducing the upfront capital costs if we can successfully relocate and utilise Uranium Resources’ Rosita ISR processing plant in South Texas as currently expected.
“The Rosita processing plant had major upgrades and additions in 2007-2008 before construction was halted. It is fit for our Temrezli Project and has the added benefit of already being designed and constructed with the ability to scale up the production profile from 800000 lb per annum to 1.6 million lb per annum with some additional upgrades which would accommodate potential future production from satellite operations that may feed into the Temrezli central processing plant.
“We’re very pleased to be partnering with the professional team at Uranium Resources who have a lot to offer in terms of hands-on ISR operations experience not to mention the benefit of bringing in-house a lot of the specialist skills that Anatolia would otherwise have been outsourcing as we transition from explorer to developer and then producer in the period ahead.”
Recommended Merger
The directors of Anatolia unanimously recommend that Anatolia security holders vote in favour of the proposed Schemes and each Director intends to vote all of the Anatolia securities they own or control at the date of the Scheme meetings in favour of the Schemes.
The directors of Uranium Resources unanimously recommend that Uranium Resources shareholders approve the issue of all consideration securities to Anatolia security holders. The directors of Uranium Resources further recommend that the URI shares be listed on the ASX.
Potential Benefits to Anatolia shareholders
- Very significant increase in average daily share trading liquidity;
- Potential to reduce the upfront capital cost of developing the Temrezli Project through anticipated synergies with URI’s Rosita ISR facility estimated to be approximately US$11.0 million the majority of which is construction and start-up;
- Leverage the skills and knowhow of URI’s experienced ISR operations team;
- Immediate and material increase in value through an attractive premium to Anatolia’s trading price in recent years;
- Benefits of a NASDAQ listing in addition to a potential premium valuation typically provided by a North American listing for uranium companies and inclusion in major Exchange Traded Funds (ETF) of uranium equities such as the Global X Uranium ETF;
- Retain material exposure to the upside from development of the Temrezli Project whilst gaining exposure to the large strategic land positions of URI in the uranium rich regions of New Mexico and South Texas;
- Significantly increased leverage to future increases in the price of uranium through exposure to URI’s large uranium resource inventory;
- Improved funding position; and
- Scrip for scrip (stock for stock) rollover relief potentially available.
Management Team and Board of Directors
Following the Merger becoming effective two of Anatolia’s current directors will be invited to join the Board of Uranium Resources one of which will include Anatolia’s managing director Paul Cronin.
Merger Process and Indicative Timetable
The Merger will be subject to various approvals including ASX approval NASDAQ approval shareholder approvals regulatory approvals and Court approval. The parties are progressing to obtain these approvals.
A Scheme booklet setting out information relevant to the Merger including an Independent Expert’s Report on whether the transaction is in the best interests of Anatolia shareholders.
Loan Arrangements
On the date of execution of the Scheme Implementation Agreement Anatolia and URI have also agreed to the terms of a convertible loan from URI to Anatolia for up to A$2 million to provide Anatolia with working capital to ensure it can continue to progress the Temrezli Project towards development and to cover costs associated with the Merger.
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