Uranium Royalty announces US$22.9 million bought deal

Uranium Royalty Corp. [URC-TSX, UROY-NASDAQ] has announced a US$22.9 million bought deal financing agreement with proceeds designated for future royalty acquisitions and purchases of physical uranium.

The underwriters have pledged to purchase on a bought deal basis 6.72 million common shares for US$3.40 each (equivalent to $4.76). Under the agreement the underwriters have the option to purchase up to an additional 15% of the offering to cover over-allotments, if any. That option can be exercised for 30 days after and including the closing of the offering, which is expected to close on February 9, 2024.

Uranium Royalty shares were active on the news, easing 4.2% or 20 cents to $4.56. The shares are currently trading in a 52-week range of $5.05 and $2.45.

Uranium Royalty Corp. is the world’s only uranium-focused royalty and streaming company and the only pure play uranium-listed company on the NASDAQ. The company provides investors with uranium commodity price exposure through strategic acquisitions in uranium interests, including royalties, streams, debt and equity in uranium companies as well as through trading of physical uranium.

Companies like Uranium Royalty are benefitting from the resurgence in uranium, as countries around the world embrace nuclear power as a way to cut carbon emissions. The sector is getting boost after Kazatomprom, the world’s biggest uranium miner, cut its guidance for production this year by as much as 14%, a move that sent uranium futures up 5% to more than US$106 per pound on February 1, 2024, the highest since 2007.

One of nuclear’s chief selling points is that it generates no Co2 emissions. This has lead to forecasts of a surge in construction of new power plants, including small modular reactors (SMRs). Some analysts are predicting that demand for uranium will continue to grow as nuclear is increasingly embraced as a “green” power source.

This bullish sentiment comes after a protracted slump in the price of uranium following the Fukushima nuclear disaster in 2011.

Back in February 2023, Uranium Royalty acquired a portfolio of royalties on U.S. projects from Anfield Energy Inc. [AEC-TSXV, ANLDF-OTCQB, OAD-Frankfurt] a company that recently announced details of a $4.3 million credit facility with existing shareholder Extract Advisors LLC.

Anfield is a uranium and vanadium development company. Its asset portfolio includes the Shootaring Canyon Mill in Garfield County, Utah. Shootaring ranks as one of only three licensed, permitted and constructed conventional uranium mills in the U.S.

The royalty package included a 2.0% net smelter return royalty on portions of the San Rafael Project, located in Utah, and operated by Western Uranium & Vanadium Corp.

It also included a 2.0-4.0% sliding scale gross value royalty on portions of the Whirlwind Project located in Colorado and Utah. The project is operated by Energy Fuels Inc. Uranium Royalty also picked up a 1.0% gross value royalty on portions of the Energy Queen Project in Utah.