The companies entered into a definitive merger agreement last Friday (August 18), saying that the combined venture will be a “high quality uranium development company” called Global Atomic.
Silvermet’s major asset is its 49-percent interest in the Befesa Silvermet Turkey joint venture, which operates a Waelz kiln facility in the country through a wholly owned subsidiary. The kiln processes electric arc furnace dust from steel mills, and produces a high-grade zinc oxide concentrate that is sold to smelters around the world.
Global Atomic Fuels is a private company with six exploration permits in the Republic of Niger. The firm recently signed a memorandum of understanding with AREVA (EPA:AREVA) regarding the development of its DASA uranium deposit and the use of AREVA’s mill facilities in Niger for five years.
The companies believe the merger will be valuable as positive cashflow from Silvermet’s zinc operations will support continued development of Global Atomic Fuels’ assets. The companies are planning additional exploration at DASA in 2017 and 2018, and plan to begin production in the near term.
“The proposed merger will be transformative for both companies, creating a uniquely positioned base metals and uranium producer with a diversified asset base,” said Silvermet President and CEO Stephen G. Roman. “We see tremendous value potential in the assets of both Silvermet and Global Atomic, and the combination should allow us to realize this potential in an accelerated timeframe.”
The merger has been in the works for almost a year, with Silvermet first entering discussions with Global Atomic Fuels regarding a potential combination in October 2016. Both companies plan to hold shareholder meetings by the end of September, and if the transaction is approved it will close soon after.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.