Australian Securities Exchange (ASX)-listed uranium mining company Peninsula Energy has announced a fully underwritten equity raising of A$105.9m ($70.52m) to fully fund the company to a position of sustainable positive free cash flow within the next two years.
The equity raise will include a A$52.9m placement to institutional investors and a A$53m entitlement offer, priced at A$0.10 per share.
It will see the issuance of around 1.6 billion new shares, equating to around 49.9% of the existing shares on issue, with the offer price marking a 13% discount to the stock close of $0.115 on 15 May 2024.
The one for four accelerated non-renounceable entitlement offer has institutional and retail components, where eligible institutional and retail shareholders can participate.
The placement will see up to nearly 528.5 million new shares offered to institutional investors at the fixed offer price. This will occur alongside the institutional entitlement offer, with the new shares from the placement not being eligible for the entitlement offer.
Peninsula Energy said the equity raising will support development and construction activities at the Lance uranium mine in Wyoming, US.
Furthermore, Peninsula continues to engage in debt discussions. These discussions, along with the potential exercise of in-the-money options due in March 2025, could provide further working capital, support growth initiatives and enhance balance sheet flexibility.
Peninsula managing director and CEO Wayne Heili said: “We continue to be buoyed by the support of existing and new shareholders to back the Lance project.
“Lance is one of the largest uranium projects in the US and with production at Lance scheduled to recommence in late 2024, we are well-positioned to become a near-term, long life, independent uranium producer. The work at Lance is continuing at full pace and we remain on track for commissioning later this year.
“This funding provides us with balance sheet strength to take us through until anticipated sustainable free cash flow generation in Q3 2025. We are still progressing debt discussions but felt this opportunity delivers a high level of financial certainty to shareholders in respect to our funding requirements.”
Last year, Peninsula received binding commitments from investors to raise A$60m to restart production at the Lance mine.
