ASX-listed uranium firms Deep Yellow and Vimy Resources agree merger

Australia-listed uranium explorers Deep Yellow and Vimy Resources have announced a US$493 million merger, against a backdrop of growing global demand for nuclear energy and increasing uranium prices.

Both companies have agreed to a merger by a scheme of arrangement, under which Deep Yellow will acquire 100% of the Vimy shares on issue, according to a joint statement released yesterday.

Deep Yellow shareholders will end up holding 53% of the combined company, with the remainder going to Vimy investors. The merged entity is estimated to have a pro-forma market capitalisation of approximately $493 million, cash and equivalents of approximately $79.2 million and no balance sheet debt.

“The expanded strong technical team of Deep Yellow, together with Vimy personnel, positions us well to bring both projects online when uranium prices support the generation of long-term, sustainable positive cash flows,” said Deep Yellow’s managing director and CEO John Borshoff.

Uranium prices nearly doubled last year amid rising global energy demand, particularly for low carbon emitting power such as nuclear. Prices have surged again since February as a result of escalating power rates in Europe following Russia’s invasion of Ukraine.

Deep Yellow is advancing a portfolio of uranium exploration projects in Namibia, while Vimy has two assets in Australia, one of which is the largest undeveloped uranium project in the country.