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Deep Yellow and Vimy merger implemented

5th August 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The merger agreement between uranium developer Deep Yellow Resources and Vimy Resources has been implemented, creating a global uranium player.

The two companies earlier this year announced the merger agreement under which Deep Yellow would acquire all of the shares in ASX-listed Vimy, with Vimy shareholders to receive 0.294 Deep Yellow shares for every Vimy share held.

The transaction placed Deep Yellow in a unique position as one of the few uranium companies globally with multi-asset exposure and development optionality to deliver its stated incentive-driven production target post-2025, given the necessary incentive uranium price. The completion of the merger has also consolidated a world-class exploration portfolio across two Tier-1 mining jurisdictions, particularly the highly prospective Alligator project, able to support the company’s ambitious strategy of establishing more than 10-million pounds a year of production.

Deep Yellow is now the only ASX-listed company with two advanced, near-development-ready uranium operations. The Tumas project, in Namibia, will complete its definitive feasibility study (DFS) by end 2022 with potential to produce three-million pounds a year of uranium oxide (U3O8). The Mulga Rock project, in Western Australia, has completed a DFS and the company plans to revise and update this study, to include base metal recovery optimisation work, detailed resource definition drilling work and mining studies with potential to produce 3.5-million pounds a year of U3O8.

With production from both these mines, Deep Yellow has the potential to become the largest pure-play uranium producer on the ASX.

“Completion of the merger between Deep Yellow and Vimy represents the combination of two world-class, advanced uranium projects and an exciting exploration portfolio, able to leverage Deep Yellow’s plans to become a leading, reliable, long-term uranium supplier into a growing market,” said Deep Yellow MD and CEO John Borshoff.

“Our consistent efforts in progressing and executing sector consolidation are starting to pay dividends, as the Vimy merger is showing. This emerging, geographically diversified platform we are developing not only satisfies Deep Yellow’s long-term growth strategy but, importantly, has the potential to create significant shareholder value. This is highlighted by the major competitive advantage we have now attained by being one of the few uranium companies globally with geographically diverse and multi-asset uranium production potential.

“This is a significant, value-creating transaction for the expanded Deep Yellow shareholder base and offers exciting growth opportunities on many fronts. Deep Yellow now has one of the largest uranium resource inventories of junior uranium mining companies globally and an experienced management and technical team who know how to successfully develop and operate uranium projects. Importantly, we are focused on ensuring our projects are developed in a timely manner for when demand and pricing conditions are suitable.

“We will continue to focus on delivering growth and value inorganically through targeted mergers and acquisitions. The uranium industry is currently ‘out-of-balance’ with too many single asset companies lacking sustainable long-term production opportunity, the necessary technical skills and funding to take their projects into development. The industry requires the consolidation that is essential in this sector to build the necessary scale and knowledge required to attract both funding for development and offer diversified, long-term production capability to better satisfy customer needs.”

Applications have been made to remove Vimy from the ASX and OTCQB lists from August 5.

Edited by Creamer Media Reporter

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