Nuclear Fuels closes $7.6 million bough deal financing

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Nuclear Fuels Inc. [NF-CSE, NFUNF-OTCQX] said it has raised $7.6 million from a bought deal private placement of 12.72 million units priced at 60 cents per unit. The amount raised includes an overallotment option that was available to the underwriters.

Nuclear Fuels shares were unchanged at 55 cents on Friday and trade in a 52-week range of $1.00 and 24 cents.

An affiliate of Encore Energy Corp. [EU-TSXV, NASDAQ), Nuclear Fuels is committed to aggressive exploration of district scale in situ recovery (ISR) uranium projects in proven jurisdictions. The company is focused on its priority Kaycee Project, located in Wyoming’s Powder River Basin. The goal is the advance the project on a path to production.

“With existing historic resources through a 33-mile trend, over 110 miles of mapped roll-fronts and 3,800 drill holes, Nuclear Fuels has secured the district under one company’s control for the first time since the early 1980s,’’ Nuclear Fuels said in a press release.

The company said it intends to use net proceeds from the offering for exploration and development expenses for the Kaycee, Moonshine (Arizona) and other projects and for working capital purposes.

Under the terms of the financing, each unit consists of one common share and one half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share for 80 cents until January 24, 2027.

Encore Energy Corp., an insider of the company, participated in the offering, acquiring 1.7 million units for $1.02 million. Immediately prior to the offering, EnCore held 9.3 million common shares of the company, representing a 19.59% of the issued and outstanding shares.

As a result of its participation in the latest offering, EncCore now holds 11.0 million common shares and 858,130 warrants, representing approximately 18.3% of the issued and outstanding common shares on an undiluted basis and 19.45% (partially diluted) assuming the exercise of warrants.

Encore Energy maintains the right to back in for a 51% ownership interest in the Kaycee project by paying 2.5 times Nuclear Fuels’ exploration expenses and carrying the project to production, upon Nuclear Fuels establishing a minimum of a 43-101-compliant resource of 15 million pounds of a U308.

The Kaycee project is believed to be the only project in Wyoming’s Powder River Basin (PRB) where all three known historically productive sandstone formations are mineralized an potentially amenable to ISR extraction.

In-situ recovery involves processing the uranium while it is still in the ground through the injection of catalyzing agents into the ore.

In-situ-recovery is only possible in porous geological formations (like sandstone) which are amenable to such a technique. On average, the capital spend needed to put an ISR uranium project into production is less than 15% of the cost to build a conventional hard-rock uranium mine.

Aside from the production cost, ISR leaves a much smaller environmental footprint because it does not require the construction of a tailings impoundment facility.

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