Early deals of Atlas Metals Group (AMG) plc reached 90 per cent after it announced Universal Pozzolanic Silica Alumina (UPSA) Ltd’s acquisition. The act is deemed to be a reverse takeover. The acquisition will be via an all-share offer, for which no figure has yet been disclosed. The proposal to undergo the reverse takeover has led to AMG's doubled share price, making it the best performer on the London Stock Exchange.
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On June 17, the AGM signed the non-binding letter of intent highlighting the intention for UPSA's reverse takeover. However, AMG has not yet provided any assurance of when or whether the reverse takeover will occur and continues to look for other potential acquisition opportunities.
UPSA holds its right to pozzolanic silica alumina (PSA) in Australia, where they have extracted 250 million tonnes in the last 99 years, currently held by its partner Claystone International. In this location, over 1.35 billion tonnes of reserves where UPSA holds the right to undergo extraction.
The current book value of UPSA is at GBP 1.08 billion (USD 1.37 billion) due to the 250 million tonnes of PSA, marking that the shareholders of AMG will receive a small percentage of the enlarged group. The estimated value of the reserves in the ground is GBP 10 per tonne (USD 13.57 per tonne); nonetheless, negotiation with the off-takers has started with the cover of up to 270,000 tonnes of PSA.
On the same day, AMG also stated that it would sell its Gold Ridge asset (deemed no longer a part of the core company strategy) in Arizona for USD 550,000. AMG highlights this as part of a plan to "radically" grow as a "valuable mid-tier mining company". Besides this, the firm is still looking for viable options to realise the value of the other legacy assets.
As per the data by investing.com, the share price of AMG as of June 16 was upward, where the price closed at GBP 15.49 (USD 21.02). The announcement of its intent to acquire UPSA on June 17, the share price skyrocketed to GBP 18.04 (USD 24.49).
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