The hottest takeover deal of the month doesn’t have anything to do with Seven (ASX:SVM) and Boral (ASX:BLD). Nor does it have anything to do with rumours surrounding Cleanaway (ASX:CWY), if you measure the ‘hottest deal’ in share turnover.
Instead, it’s the buyout of relative microcap Base Resources (ASX:BSE) by NYSE and Toronto-listed Energy Fuels, a producer of uranium and, more recently, REEs.
Base Resources took the crown on Wednesday for the stock with the most unusual number of trades compared to its 4w average – capping off three straight days of gains for the stock.
Where average turnover volume across the last month is 2.8M shares, on Wednesday, that number was far higher at 11.3M.
Most fundamental to the rapid increase in share price is that Energy Fuels wants to buy Base at a 188% premium, at 30cps.
Base shareholders will receive a dividend just over 6cps and shares in Energy Fuels in return – a deal which, clearly, appeals to everyone.
On the 19th of April, shares were worth 10c. On Monday they soared to 23.5cps, and have increased to 24cps since.
As a result, one week returns are nearly +130% while YTD performance is just under +55%.
Energy Fuels is predominantly a uranium player providing the US market and intends to open two new mines this year, but the company has also been gearing up to become an REE player in the 2020’s.
Base Resources describes itself as a mineral sands player with projects in Africa, but Energy Fuels is interested in its monazite project.
Monazite is radioactive and Energy Fuels appears set to process that ore at its own facilities – but not for nuclear energy generation.
Instead, Energy Fuels will extract REEs from monazite ore at its White Mesa Mill, which the company describes as the only operating “conventional uranium and vanadium mill in the US.”
Ultimately, the company has spotted a cheap opportunity to pick up an Australian company with the type of ore it wants to use from which to extract REEs.
Energy Fuels has already set up shop as a US-Europe REE supply chain proponent with commercial sales launching in the early 2020’s.
The buyout will also mean that Base Resources’ monazite project can ultimately get off the ground.
BSE last traded at 24cps.