Peninsula Energy Ltd (ASX:PEN) (OTCMKTS:PENMF) (FRA:P1M) has completed a Share Purchase Plan (SPP) to eligible shareholders raising a total of A$2 million.
The SPP followed a A$13.4 million placement to institutional and high net worth investors and was offered at the placement price of A$0.15 per share.
SPP eligible shareholders were able to each subscribe for up to A$30,000 worth of new ordinary shares, however, the company was swamped with 600 applications received for a total of more than A$7.6 million in shares by the SPP close on Friday, June 18, 2021, prompting a scale-back.
Physical uranium purchase
Net proceeds will be used to settle the purchase of 300,000 pounds of natural uranium concentrates (U3O8) concentrates at a price of US$31.35 per pound, which is reflective of the prevailing uranium spot price.
Peninsula's board believes the acquisition of physical uranium is strategically aligned with preparations for the company’s flagship Lance Project to transition to low pH ISR operations.
The acquired uranium inventory may ultimately provide a source of funding for the restart of operations at Lance following a final investment decision.
PEN believes that holding uncommitted uranium inventories at a time when there is a strong and continued push by the US Government to support nuclear power generation and the domestic production of critical minerals like uranium, enhances its ability to successfully participate in expanding market opportunities.
Settlement is due in June 2021 and the uranium will be stored at the Cameco facility in Ontario, Canada.
Scaled-back applications
The strong demand for the SPP has necessitated a scale-back of valid applications from eligible shareholders to the SPP maximum of A$2 million on a pro-rata basis.
Excess application monies will be refunded to each applicant by cheque or direct to their bank account as soon as practicable.
The SPP shares will be issued to applicants on June 29, 2021, and will commence trading on June 30, 2021.
Holding statements will be despatched on June 30, 2021.