- Peninsula Energy (PEN) will launch a fully underwritten entitlement offer to raise $40.3 million and will entirely pay off its debt
- The entitlement offer will allow shareholders to purchase nine new shares for every five already held for a price of 7.1 cents per share
- Funds from the equity raise will enable Peninsula to pay off its $26.3 million in debt as well as accrued interest and provide working capital for the Lance Uranium Project in Wyoming, U.S.
- Following debt repayment, Peninsula will no longer pursue partial monetisation for its uranium sales contract book
- Finance Director, Chief Financial Officer and Joint Company Secretary David Coyne has also indicated he will resign from his full-time role to take up a position with another company
- Peninsula’s share price closed 30.8 per cent in the red to trade for 9 cents each
Peninsula Energy (PEN) will launch a fully underwritten entitlement offer to raise $40.3 million and entirely pay off its debt.
The renounceable entitlement offer will allow eligible shareholders to purchase nine new shares for every five already held on June 10, 2020 for an issue price of 7.1 cents per share.
Funds from the equity raise will enable Peninsula to pay off its debt of approximately $26.3 million (US$16.8 million) as well as interest accrues under the debt term facility from the beginning of April. The company estimates the debt repayment will save it approximately $2.9 million in interest payments per annum.
This would leave Peninsula with approximately $14.5 million in net cash, and as such the company has decided it will no longer pursue the partial monetisation of uranium sales from its Lance Uranium Project in Wyoming in the United States.
At present, the company has five sales agreements lined up for up to 5.5 million pounds of triuranium octoxide at a price of US$51 to US$53 (roughly A$74 to $76.9) per pound, up until 2030.
Peninsula Managing Director and CEO Wayne Heili said the capital raising will position the company to capitalise on improving market conditions for uranium.
“This equity raising will put us in the strongest position we have been in for years – debt-free, cash in the bank, cashflow from our uranium contract book and holding a developed uranium production project, which we are optimising, ready to hit the ‘go’ button when the market fundamentals are right.”
“We will be in an excellent position to not only capitalise on continued improvements in the global uranium market, but specifically in the U.S. Recent policy framework recommendations by the U.S. Nuclear Fuel Working Group are expected to materially benefit U.S. uranium mines, including our Lance Project, which has the biggest resource of any recently-producing US project and is the only one authorised to use low pH in-situ recovery.”
Following the equity raise and debt repayment, Finance Director, Chief Financial Officer and Joint Company Secretary David Coyne will resign from his full-time role to take up a position with another company. He will remain on Peninsula’s board as a non-Executive Director and assist the company under a consultancy arrangement.
Peninsula’s share price closed 30.8 per cent in the red to trade for 9 cents each.