Uranium Royalty Corp. arranges US$30 million bought deal

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Uranium Royalty Corp. [TSX- URC, NASDAQ-UROY] has announced a US$30 million bought deal financing agreement with proceeds to be used to fund future purchases of physical uranium, and implement the company’s growth strategy through future acquisitions of royalties, streams, physical uranium.

The company said a syndicate of underwriters has agreed to purchase on a bought deal basis 10.2 million Uranium Royalty common shares at US$2.94 each (equivalent to approximately $4.00 per share). The underwriters have been granted to purchase up to an additional 15% of the offering to cover any over-allotments at the offering price. The green shoe option will remain open for 30 days following closing, which is expected to occur on October 17, 2023.

Uranium Royalty shares were active on the news, easing 9.0% or 40 cents to $3.90. The shares are currently trading in a 52-week range of $4.38 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.

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.

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