enCore Energy Corp. (TSX-V:EU, OTCQB:ENCUF) has announced it will raise approximately C$30 million in an underwritten public offering as it advances its uranium properties and acquires new ones.
The uranium development company said it has entered into an underwriting agreement with Canaccord Genuity as lead underwriter, together with a syndicate of underwriters for the sale of 9,231,000 of its units at C$3.25 each.
Corpus Christi, Texas-based enCore said net proceeds from the offering will also be used for plant upgrades, drilling, maintenance and refurbishment, community outreach and communications, licensing and permitting and for general corporate and working capital purposes.
READ: enCore Energy to acquire Alta Mesa uranium project in South Texas from Energy Fuels for US$120 million
In addition, if it is unable to complete a potential loan transaction contemplated by a non-binding term sheet before February 15, 2023, it expects to use a portion of the proceeds from the offering to help fund its pending acquisition of the Alta Mesa ISR uranium project in South Texas.
The company said each unit in the offering will consist of one common share and one-half of one common share purchase warrant, with each warrant entitling the holder to purchase an additional share for a period of 36 months from the closing date of the offering at an exercise price of C$4.05 per warrant share.
It said it has also granted the underwriters an option to purchase up to an additional 1,384,650 units on the same terms and conditions exercisable at any time, in whole or in part, until 30 days following the closing date, for market stabilization purposes and to cover over-allotments, if any.
Closing of the offering, which is expected on or about February 10, 2023, is subject to market and other customary conditions, including approvals of the TSX Venture Exchange and the NYSE American, enCore added.
Subscription receipt units
The company also announced it has agreed to file a preliminary short form prospectus to qualify 23,277,000 units of the company to be issued up conversion of 23,277,000 previously issued subscription receipts, issued on December 6, 2022.
It said the subscription receipt units will be issued upon satisfaction of certain escrow release conditions including the satisfaction of each of the conditions precedent to the closing of the Alta Mesa acquisition - other than the payment of the cash portion of the consideration in connection the Alta Mesa acquisition. Each subscription receipt unit will be comprised of one common share and one common share purchase warrant, with each warrant entitling the holder to purchase another share for C$3.75 for a period of three years following the satisfaction of the escrow release conditions.
enCore noted that the subscription receipts and subscription receipt units have not been, and will not be, registered under the US Securities Act or any US state securities laws, and may not be offered or sold in the US without registration under the US Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom.
enCore Energy is the most diversified In-Situ Recovery uranium development company in the US and recently announced it entered into a definitive agreement to acquire the Alta Mesa In-Situ Recovery (ISR) uranium project.
The transaction will position enCore as a leading US-focused ISR uranium company with the proven management expertise required to advance multiple production opportunities within its portfolio. enCore is focused on becoming the next uranium producer from its licensed and past-producing South Texas Rosita Processing Plant by 2023. The South Dakota-based Dewey-Burdock project and the Wyoming Gas Hills project offer mid-term production opportunities, with significant New Mexico uranium resource endowments providing long-term opportunities.
The enCore team is led by industry experts with extensive knowledge and experience in all aspects of ISR uranium operations and the nuclear fuel cycle. enCore is committed to engaging and working with local communities and indigenous governments to create a positive impact from corporate developments.
Contact the author at stephen.gunnion@proactiveinvestors.com