Australian Strategic Materials’ shares more than double on $450m takeover offer from US uranium miner

The board of West Perth-based rare earths producer Australian Strategic Materials has accepted a $450 million takeover offer from the United States’ largest uranium miner. New York-listed Energy Fuels is offering ASM shareholders a 121 per cent premium to its last trading price via a $1.60 a share offer. The offer is split between $1.47 of Energy Fuels’ scrip plus a 13¢ cash dividend. “This proposed combination delivers a significant premium for ASM shareholders and ensures our shareholders retain the opportunity to participate in the substantial upside of a larger, better capitalised critical minerals business,” ASM managing director Rowena Smith said. “We are pleased to recommend this transaction not only for the value it delivers but it accelerates the execution of our mine to metals strategy in a way that unlocks greater scale, de-risks delivery and positions us to capture the full potential of our rare-earths opportunity.” Energy Fuels, which has a market value of $8.3 billion, wants to branch out from its core uranium mining business to create the largest “fully integrated rare earth element mine-to-metal and alloy” producer outside of China. ASM’s operating Korean metals plant and its planned American metals plant is set to be merged with Energy Fuels’ existing rare earth element oxide production at the White Mesa mill in Utah. The White Mesa mill is the only US facility capable of separating monazite concentrates into both light and heavy rare earth element oxides, according to Energy Fuels, which will be utilised in ASM’s metallisation and alloying facilities in South Korea and the US. ASM is also developing a rare earths mine in NSW, which it hopes to use as a source of feedstock for its metals plants by the end of 2029. ASM shares briefly peaked above $2 in October as investors piled into rare earth stocks leading up to Australia and the US signing a critical minerals pact. Anthony Albanese and Donald Trump agreed to jointly invest more than $US3b in mining and refining across the two countries, mainly in rare earths, to curb Chinese market dominance. Rare earth elements are essential to build specialised magnets that power military equipment, smartphones, wind turbines and electric cars. In the immediate wake of the Australian-US pact, experts said there was huge gap in the rare earth supply chain that needed to be filled. “We spend a lot of time talking about mines, and we spend a lot of time talking about magnet factories, but there’s still a midstream that I think is being overlooked,” Canaccord Genuity Australia head of mining research Reg Spencer said at the time. “So once you have a rare earth oxide like what Lynas produces, you have to metalise it and turn it into an alloy before you can make it into a magnet. Right now, almost all of that metallisation and alloying capacity is in China. “And so if there are groups that are looking to do midstream, I think they could be of interest to the Australian and US governments.” ASM is one of the most advanced companies on the midstream front. Shares in ASM were up 115 per cent to $1.56 at 8.50am.