Energy Fuels raises $5 mln for potential acquisitions, development

Energy Fuels (TSE:EFR) says it will raise $5 million through a bought deal public offering, with the proceeds to be used for future exploration and development costs, as well as potential property acquisitions. 

In a statement released after market close on Tuesday, America's largest conventional uranium producer said Dundee Securities, as lead underwriter on behalf of a syndicate, agreed to purchase 31.25 million common shares of Energy Fuels at a price of 16 cents apiece. 

The underwriters were also granted an option to purchase up to an additional 15 per cent of the offering, excercisable in whole or in part at any time up to 30 days after the closing date. 

The deal is scheduled to close in mid October, said the company, subject to regulatory approvals. 

Fresh after the closing of its acquisition of Strathmore Minerals, Energy Fuels on a recent conference call made it clear that it is keenly optimistic uranium prices will recover enough to get high-potential projects into production. 

The gem in its latest deal is the Roca Honda project in the Grants Uranium District, expected to eventually feed its flagship White Mesa Mill located in southeast Utah. Roca Honda is one of the largest and highest-grade uranium development projects in the U.S. Energy Fuels is developing Roca Honda with its partner, Sumitomo Corporation of Japan, who holds 40% of the project.

On a conference call earlier this month, Energy Fuels provided no specific financial guidance, but said it expects uranium sales to reach one million pounds this fiscal year. It says low uranium prices haven't had much impact on the company because it has locked production into term contracts. The company predicts prices can soar as high as $75 per pound.

Energy Fuels is America's largest conventional uranium producer, supplying approximately 25 per cent of the uranium produced in the U.S., and is also a significant producer of vanadium. 

It operates the White Mesa Mill, which is the only conventional uranium mill currently operating in the U.S., and is capable of processing 2,000 tons per day of uranium ore.