The Board of Vimy Resources Limited (ASX: VMY, OTCQB: VMRSF) (Vimy or Company) notes the ASX release dated 19 November 2021 by Deep Yellow Limited.

The release refers to a now lapsed merger proposal from Deep Yellow for the acquisition of 100% of Vimy fully paid ordinary shares (via scheme of arrangement) by the issuance of one Deep Yellow ordinary share for every 3.74 Vimy ordinary shares which was outlined in a confidential proposal dated 15 November 2021 (Proposal)'

Vimy provides the following comments in relation to the unsolicited, unconventionally structured and nonmarket premium Proposal provided by Deep Yellow.

Proposal required Vimy to commit to a binding transaction within 72 hours without due diligence.

Deep Yellow's unsolicited Proposal unconventionally required Vimy to accept the Proposal within 72 hours and sign a Binding Merger Term Sheet and make a public announcement without any due diligence by Vimy on Deep Yellow. The Proposal also committed Vimy to exclusivity with an associated approximate $3 million break fee liability.

Proposal did not provide an appropriate control premium.

While the Proposal was labelled a 'merger of equals', it was for the acquisition of 100% of the shares in Vimy. The Proposal implied a 10% premium to Vimy's last close1 which the Vimy Board deemed did not reflect an appropriate control premium.

Proposal did not appropriately reflect Vimy's contribution to the expanded Deep Yellow.

Deep Yellow's Proposal provided Vimy shareholders with approximately 43% of the combined company.

In the Board's opinion, Vimy's ownership interest in the combined group should be materially higher than the proportion offered in the Proposal; Vimy's response to Deep Yellow dated 17 November 2021 is attached to this release. Vimy is disappointed that Deep Yellow has publicly announced its lapsed Proposal after Vimy offered to engage privately in good faith with Deep Yellow to explore a meaningful and value led transaction. Earlier engagement from 17 September 2021 referred to in Deep Yellow's ASX release was in relation to an incomplete and conditional zero premium acquisition concept which the Vimy Board did not view as warranting engagement at that time.

Vimy Chairperson, Cheryl Edwardes said: 'The Vimy Board assessed the unconventionally structured proposal and found it deficient on many points. Expecting any Board to sign a binding merger term sheet within 72 hours of receipt with exclusivity and break fee liabilities without due diligence is unrealistic and uncommercial. The Vimy Board is committed to maximising value for our shareholders and are open to engaging with all parties in a professional and respectful manner, including Deep Yellow, under appropriate confidentiality arrangements to create a level playing field for all parties that have interest in a corporate transaction.'

Vimy will continue with its strategic review process announced to the ASX on 18 November 2021 to consider the value that may be achieved through potential corporate transactions with recognised industry participants as an alternative to advancing Mulga Rock on a 100% Vimy basis. Vimy has appointed Macquarie Capital Australia Limited as financial adviser and MinterEllison as legal adviser to assist the Board of Vimy with the Strategic Review Process.

Contact:

Steven Michael

Tel: +61 8 9389 2700

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