The combined company will become a large-scale vanadium developer in Australia, consolidating two adjoining projects across one orebody and facilitating the operational and corporate synergies by creating a single integrated project
Australian Vanadium (AVL), which operates the Australian vanadium project, has signed a binding Scheme Implementation Deed (SID) to merge with Technology Metals Australia (TMT).
AVL will fully acquire TMT, under a scheme of arrangement, subject to the satisfaction of certain conditions.
Under the terms of the agreement, TMT Shareholders will the Australia-based mineral exploration company receive 12 AVL shares for every TMT share held, which implies an offer price of A$0.324 per TMT share, totalling A$217m ($139m).
The offer represents a 9.8% premium to TMT’s last close price, based on AVL and TMT’s last closing prices of A$0.027 per share and A$0.295 per share respectively.
The merger will consolidate two adjoining projects across one orebody and facilitate the operational and corporate synergies by creating a single integrated project.
The combined company will become a large-scale vanadium developer in Australia.
AVL CEO Graham Arvidson said: “The combination of Australian Vanadium and Technology Metals Australia is transformational for both companies and marks a significant milestone in both management teams’ efforts to develop their respective projects.
“The logical consolidation of two adjoining projects on the same orebody will unlock material synergies for both sets of shareholders.
“If successful, the transaction will create the leading ASX-listed vanadium developer and a world-class asset of scale located in a Tier-1 mining jurisdiction.”
AVL will conduct an institutional placement to raise A$15m to finance the ongoing project and corporate initiatives during the transaction period.
AVL shareholders will hold around 58% of the combined company and TMT shareholders around 42% of the combined company.
The transaction will provide tangible benefits including operational and corporate synergies, enhanced project economics and expansion optionality.
It will consolidate two adjoining projects with a combined mineral resource base representing over 25 years of mine life with opportunities to further extend and expand mine life.
The merger will optimise mine processing schedules, including product blending opportunities, project infrastructure and capital costs.
TMT managing director Ian Prentice said: “We are excited to be proposing the consolidation of the Gabanintha vanadium orebody, arguably one of the best-undeveloped vanadium resources in the world.
“This all comes at a pivotal time for the global vanadium industry as vanadium flow batteries are established as a critical player in the long-duration energy storage market, a key requirement for the world’s transition to net zero and a cleaner future.
“We very much appreciate our major shareholder RCF’s demonstrable support for the vanadium thematic and the development of this world-class asset.”