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US Energy Fuels taps into Madagascar rare earths

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Adds comment from US Energy Fuels, recasts, adds detail throughout

MELBOURNE, April 22 (Reuters) -U.S.-based uranium and rare earths producer Energy Fuels UUUU.A has bought a mineral sands miner with a project in Madagascar that will allow it to develop aglobal supply chain for rare earths.

The Denver-headquarteredproducer has agreed to buy Australia-listed miner Base Resources for A$375 million ($240.90 million), both companies said on Monday. Base owns the heavy minerals sands Toliara project in Madagascar.

The deal comes as Western producers diversify their supply chains for rare earths, which are used in everything from wind turbines to defense. The commodities are typically dominated by China.

Toliara producesa monazite stream as a byproduct of its titanium and zirconium production, from which rare earths can be extracted and processed at Energy Fuels' White Mesa Mill in Utah, Energy Fuels said.

Energy Fuels mines uranium in the United States which is processed at the mill, the only operating uranium mill in that countrythat can handle radioactive material.

It is commissioning a plant that can produce up to 1,000 tonnes per year of rare earths neodymium and praseodymium.

"Energy Fuels is currently engaged in high-level discussions with various U.S. government agencies and other offices who provide support for critical mineral projects, domestically and abroad," the company said in a statement.

Shares of Base Resources BSE.AX surged 100% to A$0.21 in early trading on Monday, with its two biggest shareholders backing the deal.

Base shareholders would get A$0.302 per share of the company under the deal, which will consist of 0.0260 shares of Energy Fuels along with an unfranked special dividend of A$0.065 for each Base share.

The transaction price represents a premium of 188% to Base Resources’ last closing price of A$0.105 per share on April 19.

($1 = 1.5567 Australian dollars)

Reporting by Melanie Burton in Melbourne and Poonam Behura; Editing by Kim Coghill, Jamie Freed and Gerry Doyle


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