Australian Strategic Materials (ASX:ASM) and Energy Fuels announced a proposed transaction under which Energy Fuels has made an offer to acquire ASM. The companies presented the deal on a joint call, describing it as a step toward building an integrated Western rare earth supply chain “from mine to metal and alloy,” spanning feedstock, separation, and downstream metallization.
Deal structure and implied value
ASM said it has entered into a scheme implementation deed with Energy Fuels that implied a value of AUD 1.60 per ASM share as of Friday, based on Energy Fuels’ trading metrics referenced on the call. Under the scheme, ASM shareholders would receive a fixed ratio of 0.053 Energy Fuels shares per ASM share, plus a AUD 0.13 cash special dividend per ASM share.
The ASM board unanimously recommended the proposal, subject to an independent expert’s assessment and the absence of a superior offer. ASM added that all directors intend to vote in favor under those conditions. Chairman Ian Gandel, described as ASM’s major shareholder with approximately 13.6% of issued shares, also intends to vote in support.
Rationale: building an end-to-end Western rare earth chain
ASM framed the proposed combination as a way to establish a rare earth supply chain independent of China, combining Energy Fuels’ U.S.-based processing and ASM’s metallization and alloying capabilities. The companies described a pathway in which feedstock from multiple projects would be processed at Energy Fuels’ White Mesa Mill in Utah, producing separated rare earth oxides including neodymium-praseodymium (NdPr) and, over time, heavy rare earth oxides such as dysprosium (Dy) and terbium (Tb). ASM said those oxides could then be converted into high-purity metals and specialist alloys at ASM’s Korean Metals Plant, supplying emerging magnet producers.
ASM also said the transaction could support its plan to establish a second metals plant in the United States. ASM management noted it has been evaluating six U.S. states and had previously conducted due diligence in Utah, including meeting the state’s governor. They said Energy Fuels’ presence and relationships could help progress that effort, while noting that other states would still “compete” as the location decision is finalized.
Asset overview and operating platform highlighted by Energy Fuels
Energy Fuels executives described the company as a dual-listed critical minerals producer (NYSE American: UUUU; TSX: EFR) built around uranium, with growing rare earth initiatives and heavy mineral sands exposure. They highlighted White Mesa Mill as the centerpiece of their strategy, describing it as the only operating conventional uranium mill in the United States and an established facility with decades of operating history.
- White Mesa Mill capabilities: Energy Fuels said it can currently produce commercial quantities of rare earth products from monazite feedstock and has the capability in “phase one” operations to produce 1,000 tons per annum of NdPr oxide, with plans to recover Dy and Tb later this year.
- Expansion planning: Energy Fuels said it has submitted permit applications for a “phase two” rare earth separation plant at White Mesa and expects that step to occur around 2027 or 2028. The company described phase two as a separate rare earth plant with targeted scale of about 6,000 tons of NdPr per year and the capability to recover Dy and Tb.
- Feedstock sources: Executives referenced monazite supply from heavy mineral sands projects including a joint venture with the Donald project in Victoria (earning 49% while receiving 100% of the rare earths), the Varamata project in Madagascar (formerly Toliara), and the Bahia project in Brazil. ASM also pointed to its Dubbo Project as an additional potential feed source for the combined chain.
Energy Fuels management also discussed corporate and financing positioning, citing about $300 million (U.S. dollars) of working capital and a $700 million convertible issuance with Goldman Sachs at a 0.75% coupon. They described the company’s stock as highly liquid and said the share price had risen as investors increasingly recognized the value of diversification across uranium and rare earths, alongside production performance.
Implications for Dubbo and ASM’s downstream facilities
ASM said it has been working to de-risk the Dubbo Project and recently released a heap leach study that management said showed a pathway to reduce capital by “over half,” bringing it to AUD 740 million. Under the proposed combination, ASM said there could be an alternative development approach: rather than producing separated oxides at Dubbo, the project could produce an intermediate product that would be processed at White Mesa, potentially reducing Dubbo capital requirements further to “something in the order of AUD 200 million.” ASM also said the intermediate product could contain low levels of uranium, which Energy Fuels has expertise in processing and monetizing, potentially improving Dubbo economics.
On ASM’s Korean Metals Plant expansion, ASM said it is focused on scaling the facility from 1,300 tons to 3,600 tons per annum and is in final negotiations to secure additional equipment. Management said product from Energy Fuels’ supply chain would be expected to support that expansion if the transaction proceeds.
Regulatory process, timing, and shareholder materials
ASM outlined a process that includes Foreign Investment Review Board (FIRB) approval and a shareholder vote under the scheme. Management said it expects FIRB approval could take approximately four months and indicated the transaction could close around June, subject to approvals. ASM said it will prepare and release a scheme booklet in the coming weeks with detailed information for shareholders.
ASM also clarified mechanics for Australian investors: in addition to the cash special dividend, the Energy Fuels equity consideration can be received as shares or via CHESS Depositary Interests (CDIs), with specifics to be included in the scheme booklet.
About Australian Strategic Materials (ASX:ASM)
Australian Strategic Materials Ltd operates as an integrated producer of critical metals for advanced and clean technologies in Australia. The company holds interest in the Dubbo Project that contains light and heavy rare earths, zirconium, niobium, and hafnium located in central-western New South Wales. It also constructs and operates Korean metals plant located in Ochang, South Korea. The company was formerly known as Australian Zirconia Holdings Pty Ltd and changed its name to Australian Strategic Materials Ltd in March 2020.
