Vimy Resources is completing a review of its Mulga Rock uranium project in Western Australia after receiving unsolicited approaches from external companies.
A day after Vimy revealed its plans to review and de-risk the uranium venture, Deep Yellow announced a proposal to acquire the company had been denied.
Deep Yellow, run by ex-Paladin Energy founder John Borshoff, stated it had approached Vimy a number of times over the past few months to initiate a merger.
Its proposal was underpinned by a price of $0.30 per Vimy share, indicating a ratio of one Deep Yellow share for every 3.74 Vimy shares.
Vimy will conduct a review that looks to “rapidly build organisational capacity and de-risk the execution” of Mulga Rock.
The company stated it had not closed the door on a merger with the review set to explore both Mulga Creek’s potential as a wholly-owned Vimy venture compared to any joint venture possibilities.
The review will take place in parallel with Vimy’s continued development of Mulga Creek.
Vimy gained mining approval for Mulga Creek in late September, before initiating an early works program into the project.
On announcement, the early works program was scheduled to take place across eight to 10 weeks up until mid-December, with Vimy looking to complete vegetation clearing, stockpiling of top-soil, excavation of overburden and construction of overburden landforms at Mulga Creek.
Given the potential of Mulga Creek, Vimy interim chief executive officer Steven Michael said it was important the company weighed up all its options in relation to the project.
“Vimy is well placed to bring into production the next uranium project in Australia and consequently, we have recently been approached by several parties seeking to become involved in Mulga Rock,” he said.
“We are focussed on the next major milestone for Mulga Rock but in parallel believe there is strong merit in channelling this growing external interest into a coordinated process with the goal of de-risking the project development and thereby maximising value for all Vimy’s shareholders.
“This will also assist Vimy with decisions as to whether to expand our project development team or possibly leverage the team and skills of other recognised uranium players if we decide to go down that path. We look forward to providing a further update to our shareholders in due course.”