PERTH (miningweekly.com) – Uranium developer Peninsula Energy on Friday announced a A$15-million capital raise to fund the purchase of 300 000 lb of uranium.
The company told shareholders that it had received firm commitments for institutional and high net worth investors for the placement of more than 89.3-million shares, priced at 15c each, to raise an initial A$13.4-million before costs.
The issue price represented a discount of 19% to Peninsula’s last trading price, and a 13% discount to the company’s 20-day volume weighted average share price.
The share placement will be done under Peninsula’s existing placement capacity, and will not require shareholder approval.
Additionally, the company would also undertake a share purchase plan (SPP) with the aim of raising a further A$2-million. The SPP will allow existing shareholders to subscribe for up to A$30 000 worth of additional shares in the company.
Proceeds from the placement will be used to settle the purchase of 300 000 lb of uranium, with Peninsula telling shareholders on Friday that it had entered into a binding agreement to purchase the physical uranium concentrate at a price of $31.35/lb.
Settlement is due in June, and the uranium will be stored at the Cameco facility, in Ontario.
Peninsula told shareholders that the acquisition of physical uranium was strategically aligned with the planned operations at its flagship Lance project as it transitions to low pH in-situ recovery (ISR) operations.
Switching from an alkaline in-situ recovery to a low pH ISR operation was expected to significantly lower operating costs and align the Lance project method of uranium recovery with the bulk of global ISR uranium producers.
The acquired uranium could ultimately provide a source of funding for the restart of operations at Lance, following a final investment decision.
“The acquisition of physical uranium underpins our focus on the transition of the Lance project to a low pH ISR operation. Adding physical uranium to our balance sheet provides significant flexibilities and potential upside as we move towards the restart of operations,” said MD and CEO Wayne Heili.
“Importantly, holding uncommitted uranium inventories at a time when there is a strong and continued push by the US government to support nuclear power generation and the domestic production of critical minerals like uranium, enhances our ability to successfully participate in expanding market opportunities.”
Peninsula previously said that its final investment decision for the start of low pH operations at Lance is dependent on ongoing de-risking and optimisation activities, and on the continued sustainable improvement in the market for US-produced uranium.