Subiaco-based Peninsula Energy is raising $40.3 million under a heavily discounted rights issue to help repay its existing term debt and advance its flagship uranium project in the US.
Subiaco-based Peninsula Energy is raising $40.3 million under a heavily discounted rights issue to help repay its existing term debt and advance its flagship uranium project in the US.
Peninsula is seeking to transition its Lance project in Wyoming to one that will use a low pH mining solution, in a bid to reduce operating costs and increase production capacity.
Proceeds from the capital raising will help the company continue its transformation strategy for the Lance project, which has been ongoing for the past two and a half years, as well as repay its $US16.8 million ($A26.3 million) corporate debt balance.
Peninsula said it would save $US2 million ($A2.9 million) each year in interest payments once the debt was repaid, while also retaining the full value of its long-term uranium concentrate sale and purchase agreements.
The agreements are expected to generate between $US6 million and $US8 million ($A8.7 million and $A11.6 million) in both 2021 and 2022, based on current uranium prices.
Peninsula managing director Wayne Heili said the company would be in an excellent position to capitalise on continued improvements in the global uranium market.
“This equity raising will put us in the strongest position we have been in for years - debt free, cash in the bank, cashf low from our uranium contract book and holding a developed uranium production project," he said.
Peninsula is currently progressing de-risk and optimisation studies for the project, which Mr Heili said would be ready to begin production when market fundamentals were right.
He said the project had the biggest resource of any recently producing uranium project in the US, hosting 43.6 million pounds.
It is also the only project in the country authorised to use low pH in-situ recovery (ISR), which is planned to run through mid-2021.
Peninsula will issue approximately 567 million shares under a nine-for-five rights issue, with new shares priced at 7.1 cents each, representing a 45 per cent discount to the company’s closing share price on May 28.
The offer is fully underwritten by Canaccord Genuity, which is also acting as lead manager and bookrunner, while Euroz Securities is acting as co-manager.
At the same time, Peninsula chief financial officer David Coyne has announced his resignation, effective mid-July.
Mr Coyne will join another company but continue as a director of Peninsula.
Company shares were down 30.7 per cent at 1:15pm AEST to trade at 9 cents.
