Proposed combination with Energy Fuels to create global critical minerals business

AIM and Media Release 

22 April 2024

Base Resources Limited
Proposed combination with Energy Fuels to create global critical minerals business

Key Points

• Base Resources and Energy Fuels have reached a binding agreement for Energy Fuels, a US-based uranium and critical minerals producer, to acquire 100% of the issued shares in Base Resources by way of scheme of arrangement.
• Base Resources shareholders to receive 0.0260 Energy Fuels common shares plus an unfranked special dividend of A$0.065 for each Base Resources share held, equating to total consideration of approximately A$0.302 per share.
• Represents a premium to Base Resources' last closing price of 188%, and a premium to the 20-day VWAP of Base Resources shares of 173%.
• Base Resources' Board unanimously recommends shareholders vote in favour of the Scheme and each Director owning Base Resources shares intends to vote all those shares in favour of the Scheme¹.
• Voting intention statements from each of Base Resources' two major shareholders (respectively owning 26.5% and 24.8% of the shares on issue) received confirming that they each intend to vote in favour of the Scheme¹.
• Transaction will establish a global leader in the critical minerals sector with a focus on rare earth elements, uranium and heavy mineral sands production and a clear strategic development pathway.
• Transaction will also create a platform for the funding and development of Base Resources' world-class Toliara Project in Madagascar, with future monazite production from the project to be processed at Energy Fuels' operating White Mesa mill in the United States.
• Base Resources' proven leadership team to be retained and continue to oversee the development, and operation of the Toliara Project and the completion of operations and closure of Kwale Operations, as well as the progression of other mineral sands and rare earths interests of the combined group.

[Note (1): In each case, in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of shareholders.]

Base Resources Limited (ASX & AIM: BSE) (Base Resources) has entered a binding scheme implementation deed (SID) with Energy Fuels Inc. (NYSE American: UUUU, TSX: EFR) (Energy Fuels) pursuant to which Energy Fuels has agreed to acquire 100% of the issued shares in Base Resources by way of scheme of arrangement (Transaction or Scheme).

Under the terms of the Transaction, Base Resources shareholders will be entitled to receive 0.0260 Energy Fuels common shares (Share Consideration), plus A$0.065 in cash via an unfranked special dividend payable by Base Resources² (together, the Transaction Consideration), for each Base Resources share held.

The Transaction Consideration implies an offer price of A$0.302 per share³ and a total equity value for Base Resources of A$375 million⁴, and represents a premium of:

• 188% to Base Resources' last closing price of A$0.105 per share on 19 April 2024.
• 173% to Base Resources' 20-day volume weighted average price (VWAP) to 19 April 2024 of A$0.111 per share.

Following implementation of the Transaction, Base Resources shareholders will hold approximately 16.4% of the combined group, which will have a pro forma market capitalisation of approximately US$1,144 million⁵.

The Base Resources Board unanimously recommends that shareholders vote in favour of the Transaction in the absence of a Superior Proposal (as defined in the SID) and subject to the Independent Expert concluding, and continuing to conclude, that the Transaction is in the best interests of Base Resources shareholders.  Subject to these same qualifications, each Director also intends to vote, or procure the voting of, all Base Resources shares held by or on behalf of them (representing 1.2% of the shares on issue) in favour of the Scheme.

Base Resources has also received voting intention statements from each of its two largest shareholders, Pacific Road Capital⁶ (owning 26.5% of the Base Resources shares on issue) and Sustainable Capital Ltd (owning 24.8% of the Base Resources shares on issue), confirming that they each intend to vote all of the Base Resources shares that they hold or control in favour of the Scheme, in the absence of a Superior Proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of shareholders.

[Notes: (2): Payment of the special dividend is conditional on the Scheme becoming legally effective. (3): Based on Energy Fuels' last closing price on 19 April 2024 of US$5.84 per share and a AUD:USD exchange rate of 0.640. (4): Based on 1,239,116,949 fully diluted Base Resources shares on issue. (5): Based on 163,651,897 Energy Fuels common shares on issue and Energy Fuels' last closing price on 19 April 2024 of US$5.84 per share. (6): Pacific Road Capital means Pacific Road Capital Management GP II Limited and Pacific Road Capital II Pty Limited.]

Potential Benefits to Base Shareholders

In addition to the significant premium offered, the Transaction provides several other potential benefits to Base Resources shareholders, including:

• Continued exposure to Base Resources' world-class Toliara Project in Madagascar.
• A strong platform for the funding and development of the Toliara Project, through the significantly greater market capitalisation, trading liquidity, market profile and funding capacity of the combined group.
• Exposure to the opportunity to add significant value to the monazite produced at the Toliara Project by capturing a greater share of the rare earth element (REE) value chain through processing at Energy Fuels' operating White Mesa mill in Utah (Mill) into separated rare earth oxides (REOs).  This opportunity remains subject to Energy Fuels completing commissioning of Phase 1 of its REE separation facility at the Mill, and then arranging funding for and making a development decision on Phases 2 and 3 of this facility.
• Enhanced opportunity to secure strategic, low-cost United States Government funding support for the development of the Toliara Project, as well as the Phase 2 and 3 expansions of the REO production capacity at the Mill.
• Increased commodity diversification via exposure to Energy Fuels' uranium business, with the White Mesa mill being the only operating conventional uranium mill, and Energy Fuels currently being the largest producer of yellowcake, in the United States.
• Continued exposure to Base Resources' proven leadership team, who will continue to oversee the development and operation of the Toliara Project and the completion of operations and closure of Kwale Operations, as well as enhance Energy Fuels' teams on the progression of other mineral sands and rare earths interests of the combined group.
• A combined group with multiple potential value drivers (REE, uranium, mineral sands) providing risk diversification and multiple directions for strategic growth, including further down the REE value chain.

Managing Director of Base Resources, Tim Carstens, said:

"This Transaction, which is the culmination of 12 months of discussions between Base Resources and Energy Fuels, reflects the exceptional quality of the Toliara Project and the efforts of the Base Resources team over the past several years to advance the project towards construction readiness.  The combined group will have the financial and technical capability to not only build Toliara into one of the best critical mineral projects in the world, but also to develop an integrated value chain for the rare earth elements that are essential to the global energy transition.  Shareholders of Base Resources will receive both a compelling and immediate premium, and the opportunity to further participate in the market recognition and development of a company with a unique diversified position in the critical minerals landscape."

Key Conditions and Terms

In summary, conditions for implementation of the Scheme include:

• Base Resources shareholder approval by the required majorities.
• the Independent Expert concluding (and continuing to conclude) that the Transaction is in the best interests of Base Resources shareholders.
• approval by Australia's Foreign Investment Review Board.
• approval of the Federal Court of Australia.
• no material adverse change and no prescribed occurrences in relation to either Energy Fuels or Base Resources.
• other regulatory approvals, including necessary NYSE and TSX listing approvals and a U.S. Securities Act exemption for the Share Consideration, and approvals of the Competition Authority of Kenya and Malagasy Competition Council.
• other customary conditions.

The SID also contains customary deal protections and exclusivity terms in favour of Energy Fuels, including "no shop", "no talk", "no due diligence", "notification" and "matching right" obligations, subject to a "fiduciary out" in certain circumstances.

The SID includes certain circumstances in which a break fee of US$2.4 million would be payable to Energy Fuels, or a reverse break fee (of also US$2.4 million) would be payable to Base Resources.

Recognising the significance of the Transaction to Base Resources, the Board has determined to provide an additional award opportunity of A$275,000 to Managing Director, Tim Carstens, under the Company's Short Term Incentive Plan, payment of which is conditional on implementation of the Scheme by 31 December 2024.

Indicative Timetable, Next Steps and Attachments

Base Resources shareholders do not need to take any action at this stage.

As outlined above, the Scheme is subject to several conditions, including approval of Base Resources shareholders at a Scheme Meeting, which is expected to be held in late July / early August 2024.

Base Resources will send a Scheme Booklet to shareholders in due course.  The Scheme Booklet will contain information relating to the Transaction and the Independent Expert's Report.  Base Resources has appointed PwC as the Independent Expert.

If the Transaction is approved by Base Resources shareholders and the other conditions precedent are satisfied or waived, the Scheme is expected to be implemented in the third quarter of 2024.

Base Resources is currently admitted to trading on AIM and subject to the Scheme becoming Effective, an application will be made to the London Stock Exchange to cancel the admission to trading of Base Resources depositary interests on AIM. The Scheme Booklet will include clear disclosures about the proposed timetable for the Scheme, including the proposed date of the Scheme Meeting and timeline for implementation and cancellations of admission to trading on ASX and AIM.

Further information in relation to the Transaction, its rationale and Energy Fuels is set out in the investor presentation attached to this announcement.  A copy of the SID, which sets out the full terms and conditions of the Transaction and associated matters, is also attached to this announcement.

Investor Briefings

Base Resources will host two investor briefings to discuss the Transaction on Monday, 22 April 2024 at 10:00am and 6:00pm (Australian Western Standard Time).  The briefings will be hosted by Tim Carstens (Managing Director) and will be by webcast and teleconference.  Access details are outlined below.  Participants will be able to ask questions via the messaging function on the webcast platform or via the teleconference line.  Participants that propose using the teleconference line will need to pre-register their details using the teleconference registration URL provided below. Upon registering, participants will receive an email with their unique PIN and dial-in details so that they can join the call on the day without speaking to an operator.

Webcast and teleconference - Asia Pacific

Date: Monday, 22 April 2024
Time: 10:00am AWST / 12:00pm AEST
Webcast URL: https://registrations.events/direct/OCP7022547013
Teleconference pre-registration URL: https://webcast.openbriefing.com/bse-mu-2024-aus/

Webcast and teleconference - UK/Europe

Date: Monday, 22 April 2024
Time: 6:00pm AWST / 11.00am (London time)
Webcast URL: https://registrations.events/direct/OCP5249348

Teleconference pre-registration URL: https://webcast.openbriefing.com/bse-mu-2024-uk/

Advisers

Base Resources has appointed Azure Capital as its financial adviser and Herbert Smith Freehills as its Australian legal adviser.

ENDS.

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the UK MAR) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.  The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR.  Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information contact:

Australian Media Relations	UK Media Relations
Morrow Sodali	Tavistock Communications
Cameron Gilenko and Michael Weir	Jos Simson and Gareth Tredway
Tel: [phone]	Tel: [phone]

This release has been authorised by the Board of Base Resources.

About Base Resources

Base Resources is an Australian based, African focused, mineral sands producer and developer with a track record of project delivery and operational performance.  The Company operates the established Kwale Operations in Kenya and is developing the Toliara Project in Madagascar.  Base Resources is an ASX and AIM listed company.  Further details about Base Resources are available at www.baseresources.com.au.

About Energy Fuels

Energy Fuels is a leading US-based uranium and critical minerals company. Energy Fuels, as the leading producer of uranium in the United States, operates mines and produces natural uranium concentrates that are sold to major nuclear utilities for the production of carbon-free nuclear energy.  Energy Fuels' White Mesa Mill is the only conventional uranium mill operating in the US today, has a licensed capacity of over 8 million pounds of U₃O₈ per year, and also produces vanadium when market conditions warrant, from various uranium-bearing ores.  Energy Fuels recently began production of advanced REE materials at White Mesa, including mixed REE carbonate, and plans to produce commercial quantities of separated REE Oxides commencing in 2024 with plans to further expand this production capability over the coming years as monazite feedstock volumes are secured.

In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the US and several uranium and uranium/vanadium mining projects in production, on standby and in various stages of permitting and development.  Energy Fuels recently acquired the Bahia Project in Brazil, which is believed to have significant quantities of ilmenite, rutile, zircon and monazite.  Energy Fuels also recently announced a Memorandum of Understanding for the potential acquisition of a 49% interest in the Donald Rare Earth & Mineral Sand Project in Victoria, Australia held by Astron Corporation Limited (ASX:ATR).

The primary trading market for Energy Fuels' common shares is the NYSE American under the trading symbol "UUUU".  Energy Fuels is also listed on the Toronto Stock Exchange under the trading symbol "EFR". Further details about Energy Fuels are available at www.energyfuels.com

BASE RESOURCES PRINCIPAL & REGISTERED OFFICE
Level 3, 46 Colin Street
West Perth, Western Australia, 6005
Email:  [e-mail]
Phone: [phone]
Fax: [phone]

BASE RESOURCES NOMINATED ADVISER & JOINT BROKER
Canaccord Genuity Limited
James Asensio / Raj Khatri / George Grainger
Phone: [phone]

BASE RESOURCES JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: [phone]

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Investor Presentation

Scheme Implementation Deed

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