How this ASX mining stock more than doubled investors' money in 1 month
A young boy sits on his father’s shoulders as they flex their muscles at sunrise on a beach
ASX mining stock Base Resources Ltd (ASX: BSE) has made shareholders very happy over the past month.
How happy?
Well, one month ago, you could have bought shares in the Australian-owned African mineral sands producer for 12 cents apiece.
Today, those same shares are trading for 26 cents, up 117%.
Investors who bought the ASX mining stock three weeks ago on 19 April, when Base Resources shares were trading for 11 cents, will be sitting even prettier. The stock is up 134% since then.
Here’s what’s been piquing investor interest.
What’s been sending the ASX mining stock through the roof?
The vast majority of the Base Resources share price gains were delivered on a single day.
On Monday, 22 April, the ASX mining stock closed the day up an eye-watering 123.8%.
Investors were snapping up shares after Base Resources reported it had entered into a binding scheme implementation deed with United States-based uranium and critical minerals producer Energy Fuels Inc. (TSE: EFR).
The deal would see Energy Fuels acquire all of Base Resources’ shares for an offer price of 30.2 cents per share, some 16% above current levels and a whopping 188% higher than the share price the day before the takeover offer announcement.
Absent a superior proposal, the ASX mining stock’s board unanimously recommended shareholders vote in favour of the acquisition.
Commenting on the potential benefits for its Toliara Project, Base Resources managing director Tim Carstens said:
The combined group will have the financial and technical capability to not only build Toliara into one of the best critical mineral projects in the world, but also to develop an integrated value chain for the rare earth elements that are essential to the global energy transition.
Carstens noted that the proposed transaction was “the culmination of 12 months of discussions between Base Resources and Energy Fuels”.
Base Resources quarterly update
The ASX mining stock gained another 2% on 30 April following the release of its quarterly update for the three months to 31 March.
Base Resources said the challenging market conditions over the past few quarters stabilised over the previous three months as demand improved and “some downstream re-stocking supported flat pricing across all products”.
Turning to the balance sheet, the company held cash of US$83 million and no debt at the end of the quarter.
As for the transaction with Energy Fuels, the ASX mining stock said its independent expert, PwC, has commenced work, as has the independent technical specialist, AMC Consultants.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.