Sprott Physical Uranium Trust launches US$200 million bought deal
Sprott Physical Uranium Trust [U.UN-TSX, U.U-TSX], has announced details of an upsized US$200 million bought deal financing. Sprott Uranium Trust is a Toronto-based vehicle set up to give investors direct exposure to the commodity via its holding of U308. Its net asset value per unit stands at $17.04 and there are currently 271.8 million units outstanding. The total net asset value of the trust is $4.6 billion.
In its latest press release, Sprott Inc. [SII-TSX, NYSE] said on behalf of the trust that an underwriter has pledged to purchase on a bought deal basis 11.6 million units of the Trust at US$17.25 per unit. The amount being raised is up from an earlier US$100 million target.
The net proceeds of the offering will be used by the Trust to acquire physical uranium in the form of uranium oxide in concentrates and uranium hexafluoride and related fees and expenses in accordance with the Trust’s objectives, and subject to the Trust’s investment and operating restrictions.
Closing of the offering is expected to occur by June 20, 2025.
On Monday, on the TSX, the units rose 3.23% or 74.5 cents to $23.81. They trade in a 52-week range of $28.34 and $18.12.
Sprott Physical Uranium Trust is the world’s largest uranium investment fund. It ranks as the largest and only publicly-listed physical uranium fund currently in the market place.
The total number of pounds of U308 held within the trust is 66.2 million pounds with a market value of $4.6 billion.
Sprott Physical Uranium Trust CEO John Ciampaglia recently noted the major policy shift under U.S President Donald Trump’s new executive orders, which aim to fast-track advanced nuclear technologies and revitalize the entire U.S. nuclear fuel cycle. “It’s a holistic approach that should benefit the sector and help the U.S. reestablish its leadership position, which it has held for decades,” he said.
In a recent report, titled “A market in transition,” uranium mining giant Cameco Corp. [CCO-TSX, CCJ-NYSE ] said that in 2024 geopolitical uncertainty and heightened concerns about energy security, national security, and climate change continued to improve the demand and supply fundamentals for the nuclear power industry and the fuel cycle that is required to support it.
“Increasingly, countries and companies around the globe are recognizing the critical role nuclear power must play in providing carbon-free and secure baseload power,” Cameco said. It said this was evidenced at the 29th Conference of Parties (COP29), where a total of 31 countries have now signed the declaration to triple nuclear energy capacity by 2050.
This growing support has led to a rise in demand with closed reactors returning to service, reactor life extensions being sought and approved, and numerous commitments and plans for advancing the construction of new nuclear capacity. In addition, there is increasing interest in the small modular reactors (SMR), including smaller versions of existing technology and advanced technology designs, with companies in energy intensive sectors looking to nuclear to achieve their decarbonization plans.
“While demand continues to increase, future supply is not keeping pace,” the report said. In 2024, about 119 million pounds of uranium was placed under long term contracts by utilities.