Impact: Neutral
Anfield Energy (TSXV:AEC, BUY, C$0.20 target, David A. Talbot) announced that it has terminated its previously announced merger with ISO Energy (read note). The development follows UEC’s (NYSEAM:UEC, Not Rated) opposition to the merger (read notable), which led to a delay in the closing of the transaction, followed by the BC Supreme Court ordering another shareholder vote (read notable). Reportedly, ISO elected not to extend the Arrangement beyond the stipulated closing date of December 31, 2024. ISO may have wished to arrange a JV instead, but AEC decided to terminate the deal instead. We believe this is a favourable outcome for both parties. ISO can now focus on putting its US assets, starting with Tony M, into production at any time given that it already has access to capacity at the White Mesa mill. Toll milling should allow ISO to avoid overhead costs and headaches of staffing its own mill. While ISO loses total control of processing its own material and cheap access to Anfield’s resources, we believe ISO may be able to get to initial production quicker and eliminate significant mill capital costs.