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(Sharecast News) - Atlas Metals announced on Wednesday that it has signed a conditional agreement to acquire Universal Pozzolanic Silica Alumina (UPSA) in a 1bn reverse takeover that would hand control of the enlarged group to UPSA's current shareholders.
The London-listed miner said the transaction would be settled through a share-for-share exchange, leaving existing Atlas shareholders with around 3% of the combined entity and UPSA vendors with 97%, subject to regulatory approvals and shareholder consent.
Completion would also require a prospectus, FCA approval, and re-admission of the enlarged share capital to the London Stock Exchange's main market.
UPSA owns the rights to one of the world's largest reserves of pozzolanic silica alumina, a key ingredient in low-carbon concrete.
Its Warialda Quarry in New South Wales, Australia, holds 99-year extraction rights for 250 million tonnes of material.
A competent person's report by SLR Consulting estimated an inferred resource of 160.68 million tonnes and calculated a net present value of AUD 3.3bn (1.6bn) over a 25-year period.
"We are delighted to have signed the conditional share purchase agreement to acquire UPSA," said chief executive Chris Chadwick.
"This transaction is anticipated to transform Atlas in the near term into a 1bn-plus market cap company, delivering substantial value for Atlas shareholders and a unique proposition on the London Stock Exchange.
"UPSA provides an opportunity to access a world-class PSA reserve at an attractive valuation.
"Given the positive environmental impact UPSA provides the international construction industry, the UPSA resources are already attracting interest from major cement and concrete players and will be targeted for use in private and government infrastructure development projects globally."
Atlas said the deal, which would trigger a change in its board and voting control, remaineed subject to due diligence and that there was no certainty it would complete.
It said it would make further announcements as the process progressed.
At 0925 BST, shares in Atlas Metals Group were up 355.5% at 45.55p.
Reporting by Josh White for Sharecast.com.