PERTH (miningweekly.com) – Uranium developer Black Range Minerals has become a takeover target for Canada’s Western Uranium Corporation, which on Friday launched an A$18.5-million offer for the Australian company.

Western Uranium was offering one of its own shares for every 750 Black Range shares held, with the offer representing a 106% premium to Black Range’s most recent closing price, and an 89% premium to the company’s 20-day volume weighted average price.

The offer was subject to the completion of a due diligence, as well as regulatory and shareholder approvals. Western Uranium would also provide Black Range with a A$750 000 loan facility, in order to ensure that the junior had sufficient working capital in the period leading up to a transaction close.

Black Range’s board on Friday unanimously recommended that shareholders accept the offer, in the absence of a superior proposal, saying it was the most compelling alternative available to shareholders at the current time.

The directors noted that the offer would provide Black Range shareholders with the opportunity to become part of a larger uranium company, which would offer short-term production opportunities and the potential to accelerate the commercialisation of the Ablation technology through field trials.

The Ablation technology involves a process for the physical separation of the uranium-bearing minerals from the gauge material.

The offer also presented shareholders with exposure to a more diversified asset base, including a combined uranium resource base of more than 95-million pounds, across nine operations.

Western Uranium owns a number of advanced-stage, near-term development projects in the US, including the Sunday mine complex, in Colorado, which was mined between 2007 and 2009, and remains fully permitted.

Black Minerals holds the Hansen/Taylor Ranch uranium project, also in Colorado, which has a Joint Ore Reserves Committee-compliant resource of 90.4-million tonnes, as well as a 50% interest in the Ablation technology which was being developed to reduce the capital and operating costs of recovering uranium from conventional sandstone hosted uranium deposits.