Another merger is set to occur in the uranium sector, with Baselode Energy (TSXV: FIND) announcing this morning that it has entered into a definitive agreement for an at-market business combination with Forum Energy Metals (TSXV: FMC).
The arrangement will see Baselode acquire Forum in a share-based transaction, with the resulting issuer to be renamed to Geiger Energy Corp (TSXV: BEEP). The combination is expected to create a “uranium exploration leader” focused on Nunavut’s Thelon Basin and Saskatchewan’s Athabasca Basin with backing from the Ore Group.
Post merger, the entity will see Forum’s Aberdeen project in the Thelon Basin become its flagship asset with exploration set to begin immediately. Baselode’s Hook project in the Athabasca Basin meanwhile will be a high-priority follow up project, providing pipeline growth opportunities for the combined entity.
Under the terms of the transaction, Forum shareholders will receive 0.3535 common shares of Baselode for each share of Forum currently held, valuing the company at $13.1 million. Baselode shareholders are expected to own 55% of the resulting company.
Post transaction, Geiger is expected to be helmed by Rebecca Hunter, who will take on the role of CEO. Stephen Stewart will maintain his role as chair of the company, The board of directors is to consist of three nominees from Baselode and two from Forum.
To enable immediate drilling to begin at Aberdeen, the two parties have also entered into an earn-in agreement for the Aberdeen project. Baselode is expected to fully fund the exploration program, with the earn-in specifying that a 50% interest can be earned in Aberdeen in exchange for exploration expenditures of $4.0 million. Post-closing, Geiger will wholly own the property.
The transaction remains subject to shareholder approval by Forum Energy shareholders, a five to one share consolidation by Baselode, alongside customary regulatory and court approvals.
The merger of equals is expected to close shortly after the date of the special meeting of shareholders, with that meeting date yet to be set.
Baselode Energy last traded at $0.12 on the TSX Venture.
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