Mineral exploration and development company Tactical Resources has agreed to go public with special purpose acquisition company (SPAC) Plum Acquisition Corp. III in a deal that represents a pro forma enterprise value of $589m.
According to the terms of the definitive business combination agreement, the existing shareholders of Tactical Resources will convert their full equity/ownership stakes into the newly formed entity.
Upon the closing of the deal, Tactical Resources’ shareholders will hold about 82% of the new public company, which is expected to be listed on Nasdaq.
The total consideration will be a number of newly issued common shares of the new company based on a $500m pre-transaction equity value of Tactical Resources.
Plum Acquisition Corp. III CEO Kanishka Roy said: “At Plum, we are committed to partnering with companies with strong business profiles and experienced management teams, and Tactical Resources stood out to us due to a compelling history of successes achieved by members of its management team and a very important mission to enhance national security.”
Tactical Resources is developing its flagship asset, the Peak project, located southeast of El Paso, Texas. It includes rights to acquire rare earth element (REE) enriched tailings and stockpiled materials extracted from the Sierra Blanca Quarry (SBQ).
The Peak project is said to be among the few rare earth hard rock direct-leach-extractable projects across the world with initial quarry operating permits already secured.
Additionally, the company holds an exclusive option to purchase SBQ’s mining lease and related infrastructure for the Peak project.
According to Tactical Resources, the Peak project will play a key role in establishing the company as a significant producer of REEs in the US.
The proceeds from the potential deal are expected to support Tactical Resources’ strategic growth plan. It will finance Tactical Resources’ operations plan for the Peak project and the progression of the company’s future production activities.
Through the deal, Tactical Resources also aims to boost its position delivering REEs to the US market to support the development of modern technologies with uses in semiconductors, electric vehicles (EVs), advanced robotics, and national defense.
Tactical Resources CEO Ranjeet Sundher said: “Tactical Resources intends to use the capital raised to transform both domestic and international rare earth element supply chains and lessen America’s reliance on overseas critical mineral resources.
“While others may be focusing on the manufacturing of singular end-products such as magnets, our focus is on the more critical raw ingredients needed to fuel the overarching rare earth elements ecosystem. “
Subject to customary conditions, including regulatory, court and stockholder approvals, the proposed transaction is expected to be completed in Q4 2024.
For the deal, Cohen & Company Capital Markets is the exclusive financial adviser, lead capital markets adviser and placement agent to the SPAC.
Jett Capital Advisors is acting as the exclusive financial adviser, lead capital markets adviser, and co-placement agent to Tactical Resources.
