AVL - Australian Vanadium

[Dona Ferentes]

“The [Murchison Technology Metals Project] is shaping up to be one of the best undeveloped vanadium projects globally." “We ... consider this to be quite a unique situation where two companies, Technology Metals and Australian Vanadium, each own half of the same orebody. We can see value to be created for the shareholders on both sides through logical consolidation and expect Regal would play a material role in construction funding once there is more clarity on the development pathway."

..
Tribeca and Regal Funds Management are pushing for a merger of the joint owners of the undeveloped vanadium deposit in Western Australia to take advantage of billions of dollars being poured into critical minerals.

Technology Metals Australia and Australian Vanadium jointly own the Murchison Technology Metals Project, a high-purity vanadium resource 50 kilometres southeast of Meekatharra in WA’s mid-West. Technology Metals says it can meet 6 per cent of world demand for the metal, production.
..
when there's a $100 million market cap, and $600 million project spend, something's gotta give.

 

[Dona Ferentes]

....when there's a $100 million market cap, and $600 million project spend, something's gotta give.

that's a given.
.
Consolidation has kicked off in the vanadium sector, with two WA explorers agreeing to a $217 million all-paper merger. The merger is driven by the desire for single ownership of the same highly prospective orebody and the goal of both companies to gain more scale in the eyes of investors.

On Monday, Australian Vanadium (ASX:AVL) and Technology Metals Australia (ASX:TMT) finalised a deal to bring together their adjoining flagship projects near Meekatharra in the State's Mid-West region. AVL will lead the merger, acquiring TMT in a deal that offers 12 of its shares for every TMT share held. This puts the paper price at just over 32 cents for TMT shares, compared to the 27 cent close last Friday.

If the merger proceeds, RCF, the major shareholder in TMT (and the largest shareholder in AVL), has committed to subscribing $15 million to an institutional placement, totaling $20 million.

In their statements to the ASX on Monday, the two companies said, "the consolidation of two adjoining projects across one orebody provides a unique opportunity to realise operational and corporate synergies by creating a single integrated project. The combined group will become the leading Australian vanadium developer with a world-class asset of scale, located in a Tier-1 mining jurisdiction."

AVL CEO Graham Arvidson stated, “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." He added that the merger would unlock material synergies for both sets of shareholders, making AVL the leading force in the Australian vanadium sector.

TMT CEO Ian Prentice welcomed the consolidation of the Gabanintha vanadium orebody in WA, describing it as "arguably one of the best undeveloped vanadium resources in the world."

Apart from these broad reasons for the deal, the two companies anticipate synergies in exploration, feasibility, and development work on the orebody, promising a 25-year mine life and the highest-grade Australian vanadium project. They also foresee better opportunities for resource expansion, improved terms from suppliers and governments, and a potential catalyst for future vanadium flow battery production in Australia.

The merger aims to provide the new company with "increased market relevance, liquidity, and balance sheet" by creating a leading ASX-listed vanadium company with a pro forma market capitalisation of $217 million and pro forma cash of $52.1 million post-completion of the Placement. The combined entity is well-funded for the next phase of project development activities.

 

[Dona Ferentes]

and, bedded this down Now 27c..
.
Raising $15.7 million, the Placement was strongly supported by Resource Capital Fund VII LP, as well as from other institutional investors. Approximately 603 million New Shares are being issued under the Placement at a fixed price of A$0.026 per New Share.

Proceeds from the Placement will be applied to support initiatives involved with the integration strategy associated with the announced merger between AVL and Technology Metals Australia Ltd (TMT), fund ongoing project and corporate initiatives, general working capital and offer costs.

Other Shareholders that have provided written statements of support include:
▪ Regal Funds Management (representing a 4.7% interest in TMT);
▪ Atasa Holdings Pty Ltd ( representing a 1.7% interest in TMT); and
▪ Tribeca Investment Partners Pty Ltd ( representing a 1.3% interest in TMT)