Vimy Resources Limited (ASX:VMY, OTCQB:VMRSF) and Deep Yellow Limited (ASX: DYL; OTCQX: DYLLF) have entered into a Scheme Implementation Deed (SID) under which the two companies propose to merge by way of a recommended court-approved scheme of arrangement between Vimy and its shareholders.
Highlights of the scheme include:
- Vimy Shareholders will receive 0.294 Deep Yellow shares for every Vimy share held on the Scheme record date;
- The merger transaction implies 28.5¢ per Vimy share, representing a premium of 35.3% to the 30-day VWAP and a 18.8% premium to the closing Vimy share price on 25 March 2022 (being the last trading day for Vimy shares and Deep Yellow shares prior to this announcement);
- Upon implementation of the Scheme, Deep Yellow shareholders will hold 53% of the merged group and Vimy shareholders will hold 47%;
- The Scheme is unanimously recommended by the Board of Vimy and each director of Vimy intends to vote all Vimy shares they control in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert opining (and continuing to opine) that the Scheme is in the best interests of Vimy shareholders;
- The merger is expected to create a new global uranium player with significant scale, cash resources of $106 million, one of the largest uranium mineral resource inventories globally (389Mlb) and two advanced, world-class assets in Tier 1 uranium mining jurisdictions; and
- Deep Yellow and Vimy will host a joint investor call at 10am AWST today.
“This merger de-risks and underpins our path to development at Mulga Rock,” Vimy managing director Steven Michael said.
“The combined financial, processing and operating strengths of both companies will enable greater optimisation and the delivery of Mulga Rock as well as an established exploration team that can unlock considerable value at Alligator River.
“The merger provides Vimy shareholders the opportunity to share in the expected significant benefits of being part of a larger, geographically diverse merged group, with the expertise to develop the full portfolio of assets in the near term.”
Commenting on the proposed merger, Deep Yellow managing director John Borshoff added:
“This merger has the potential to be a significant value-creating opportunity for both Deep Yellow and Vimy shareholders.
“The merger combines two world-class assets, both in Tier 1 mining jurisdictions, into a single group with scale and know-how.
“The expanded strong technical team of Deep Yellow, together with Vimy personnel, positions us well to bring both projects online when uranium prices support the generation of long-term, sustainable positive cash flows.
“Our vision has been to deliver growth organically and inorganically to Deep Yellow shareholders and I am very pleased we have started to achieve that in this process. This transaction also builds on the pipeline of exploration assets able to add growth organically and critically, creating a platform for additional value accretive acquisitions.”