Australian uranium explorers Deep Yellow, Vimy agree on $493m merger deal

The deal comes as uranium prices nearly doubled last year amid a global push for renewable power, including a commitment by France to build at least six new nuclear reactors in a push for carbon neutrality by 2050. Prices surged further since February by the sharp rise in power rates in Europe following Russia’s invasion of Ukraine.

Both companies have agreed to a merger by a Scheme of Arrangement, under which Deep Yellow will acquire 100% of the Vimy shares on issue, the statement said.

Each shareholder of Vimy will receive 0.294 Deep Yellow ordinary fully paid shares for every ordinary fully paid Vimy share held. If a merger goes through, Deep Yellow shareholders will hold 53% of the combined entity and Vimy shareholders will take the remainder stake, according to the statement.

“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,” said John Borshoff, managing director and chief executive officer of Deep Yellow.

The merged entity is estimated to have a pro-forma market capitalisation of approximately A$658 million, cash and equivalents of approximately A$106 million and no balance sheet debt.

Vimy’s board unanimously recommends that shareholders vote in favour of the Scheme, in the absence of a superior proposal.

Paladin Energy, another Australian uranium production company, said in a statement it wants to raise more than A$200 million in capital to help restart its Langer Heinrich uranium mine in Namibia.