After months of dithering back and forth, it appears that Myriad Uranium (CSE: M) and Rush Rare Metals (CSE: RSH) have finally come to terms under a definitive agreement to merge.
The transaction will see Myriad acquire Rush in an all stock deal. Shareholders of Rush are set to receive 0.5405 shares of Myriad for each share of Rush Rare Metals that they hold. The figure is said to represent a premium of 18% based on the closing price of the equities on January 6, which was the last day before a binding letter of intent was entered into by the two parties. Discussions for a proposed merger however have been ongoing since early August.
As part of the arrangement, Myriad will also assume Rush’s outstanding convertible debentures.
The merger arrangement is framed around the consolidation of the Copper Mountain Uranium Project in Wyoming, which Myriad holds a 75% interest in while Rush holds the remainder. Copper Mountain is said to have seven historic uranium deposits and 15 further targets, with a 1982 estimate suggesting that as much as 650 million pounds of U3O8 could be present on the property.
“Unifying 100% ownership of the Copper Mountain Uranium Project is a clear value catalyst for Myriad which will also simplify decision making and execution, improve capital efficiency and remove the structural discount of split ownership while making the project and Myriad itself easier for investors to value,” commented Thomas Lamb, CEO of Myriad.
“Copper Mountain is viewed by a number of sector commentators as a call option on U.S. uranium because of its scale, location, and exceptional history. In the 1970s, Union Pacific and Southern California Edison invested roughly US$125 million in today’s dollars, identified multiple deposits, and advanced plans for a large conventional uranium mine before development was halted by the Three Mile Island incident.”
As part of the arrangement, Rush will be spinning out their Boxi Property in Quebec to a new entity, referred to as Rush Spinco. Shareholders of Rush will receive one share of the spinco for every four shares of Rush they hold, in addition to the Myriad consideration.
The proposed merger remains subject to shareholder approval by Rush Rare Earth shareholders, as well as customary regulatory approvals.
A timeline for closing was not provided.
Myriad Uranium last traded at $0.44 on the CSE.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
