The Federal Court of Australia has given its approval for Lotus Resources Ltd (ASX:LOT) to acquire A-Cap Resources Ltd (ASX:ACB), marking a significant milestone in a planned merger to create a leading African-focused uranium player with significant scale and resources.
The court greenlit the scheme of arrangement between A-Cap and its shareholders, under which Lotus will acquire 100% of the shares currently held by A-Cap, and a separate scheme of arrangement between A-Cap and its listed option holders.
The approvals have been lodged with the ASIC, rendering them legally effective.
Consequently, trading of A-Cap shares and listed options has been temporarily suspended, with the implementation date for the merger set for November 7, 2023.
Leading uranium player
Lotus expects to command a leading position within the uranium market following the merger of the two Perth-based companies.
The merger will combine Lotus' production-ready Kayelekera uranium project in Malawi with A-Cap's future large-scale growth asset, the Letlhakane uranium project in Botswana, and deliver a near five-fold increase in its resource base to 241 million pounds U3O8.
This will rank Lotus as the third-largest among ASX-listed peers in terms of resources.
Furthermore, it puts the company in a favourable position for a market re-rating to align its value with other listed peers on an enterprise value per pound resource basis.
Leveraging expertise
“We are exceptionally pleased that the merger has now become legally effective, with implementation scheduled to occur next week,” Lotus managing director Keith Bowes said.
“Although Lotus remains focused on restarting the Kayelekera Project as soon as it is practicable, there is significant work that can be done on Letlhakane in the short term to optimise the value of the project, using Lotus' proven uranium expertise and skills.
“We look forward to working with our new shareholders as we develop our strong project portfolio to capitalise on the strong and improving uranium thematic.”