UEX raising $21.2 million in bought deal
UEX Corp. [UEX-TSX, UEXCF-OTC] said Friday it is raising $21.2 million from a bought deal private placement, money that will be used to meet the company’s obligations under a loan agreement with Denison Mines Corp.’s [DML-TSX].
Proceeds are also earmarked for exploration the company’s properties and for general corporate and working capital purposes.
UEX said Friday it has struck a deal with an underwriting syndicate led by Sprott Capital Partners that resulted in the underwriters purchasing 72.95 million UEX units for 29 cents per unit.
Each unit consists of one common share and one-half of a common share purchase warrant. Each whole warrant can be exchanged for one common share at 40 cents at any time up to 36 months after the closing date of the offering on Sept 7, 2021.
UEX is a Canadian uranium and cobalt exploration and development company involved in a portfolio of uranium projects. Its portfolio of projects is located in the eastern, western, and northern perimeters of the Athabasca Basin in Saskatchewan.
The Athabasca Basin is the world’s richest uranium belt. In 2019 it accounted for approximately 12.6% of the global primary uranium production.
On Friday, UEX shares rose eased 1.6% or $0.005 to 30 cents on volume of 647,880. The shares are trading in a 52-week range of 49.5 cents and 12 cents.
News of the bought deal financing comes after Denison recently agreed to provide UEX with an interest-free, three-month term loan of up to $41 million to facilitate UEX’s purchase of Overseas Uranium Resources Development Co. Ltd.’s (OURD) wholly-owned subsidiary, JCU (Canada) Exploration Co. Ltd.
In a subsequent news release on August 3, 2021, UEX said it had sold 50% of JCU’s shares to Denison for $20.5 million. UEX said $20.5 million of the loan was immediately retired after UEX transferred 50% of the JCU shares to Denison.
JCU holds a portfolio of uranium project joint venture interests in Canada, including a 10% interest in Denison’s 90%-owned Wheeler River uranium project in Saskatchewan.
UEX and Denison have struck a shareholders agreement governing the management of JCU. Under the deal, UEX will be the manager of JCU as long as Denison does not own more than 50% of JCU’s shares.
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, including its 90%-owned Wheeler River project, which holds the high grade Pheonix and Gryphon uranium deposits (on the Wheeler River property).
Wheeler River is the largest undeveloped high-grade uranium project in the eastern portion of Saskatchewan’s Athabasca Basin. Proven and probable reserves at the site stand at 109.4 million pounds of U3O8. That includes 141,000 tonnes at 19.1% U3O8 or 59.7 million pounds in the Pheonix zone, and 1.26 million tonnes at 1.8% U3O8 or 49.7 million pounds in the Gryphon zone.
A NI 43-101 compliant pre-feasibility study was completed for Wheeler River in September, 2018. It is highlighted by the selection of the in-situ recovery mining method for the development of the Pheonix deposit, with an estimated average operating cost of US$3.33 per pound of U3O8.