BlueJay Mining PLC (AIM:JAY, OTCQB:BLLYF) has announced a deal to diversify into helium and hydrogen, acquiring a 51% stake in White Flame Energy Ltd for £1.4 million paid in shares.
The company will also be granted a three-year option to purchase the remaining 49% on the same terms.
White Flame holds three exploration and exploitation licenses covering 8,429 square kilometres in East Greenland, with the ground seen as highly prospective for helium, white hydrogen, and other industrial gases - as well as hydrocarbons.
Bluejay directors Eric Sondergaard (managing director), Michael Hutchinson (chair) and Roderick McIllree (non-exec director) are shareholders in White Flame – owning 1.25%, 0.63% and 36.70% respectively.
“We believe is highly value accretive to unrelated Bluejay shareholders,” Sondergaard said in a statement.
He added: “This transaction was designed from the outset to be a win-win for both parties … [it] represents fantastic value.
“Importantly, shared directors and management will facilitate a smooth integration, ensuring aligned interests due to a deep understanding of both companies' projects and operations.
“This also leads to a significant cost savings in the acquisition process, which directly benefits all shareholders.”
The deal is conditional upon shareholder approval, with a general meeting scheduled for 10 July 2024 in London.
If approved, this acquisition will significantly expand Bluejay's footprint in the industrial and natural gas sectors.
“The project is substantial, having seen to date approximately US$125m spent on detailed and focussed work as well as local and regional infrastructure including roads and airstrip,” Sondergaard added.
“The licences have recently been extended for an additional three years, which are followed by an additional 7-year exploration period, subject to certain preconditions and performance requirements, eventually transferring to a 30+ year exploitation license.
“Importantly the project has no immediate requirement for expenditure and the company will now undertake an option study to determine the best and most appropriate path forward in terms of drilling and development now the asset is in a public company for the first time in its history."