Deep Yellow, an ASX-listed uranium developer, is set to embark on a significant financial venture aimed at propelling its uranium projects both in Australia and Namibia to new heights. In a bold move to secure the capital necessary for these ambitious endeavors, the company has announced plans to raise a substantial A$220 million through a two-tranche placement. Additionally, Deep Yellow is seeking to gather an extra $30 million via a share purchase plan (SPP) exclusively for its eligible shareholders, signaling a period of vigorous development and expansion for its operations.
The fundraising strategy has evidently resonated well within the investment community, drawing strong support from a blend of both new and existing domestic and international institutional investors. The enthusiasm from these investors has been so pronounced that the demand has already surpassed the initial financial target set by Deep Yellow, highlighting the market’s confidence in the company’s strategic direction and its future prospects in the uranium sector.
The mechanics of the fundraising effort are meticulously planned, with the first tranche aimed at raising about A$140 million through the issuance of 114 million shares priced at A$1.22 each. The subsequent tranche seeks to add just under A$80 million into the company’s coffers, involving the issuance of 64 million shares, pending approval from shareholders at a meeting scheduled for April 30. Moreover, the SPP is designed to be inclusive, extending participation to all shareholders on record as of March 8 who are residents of Australia, New Zealand, Hong Kong, Panama, or the UK.
The completion of these fundraising activities is anticipated by May 2, setting a solid financial foundation for Deep Yellow to advance its uranium projects. Specifically, the proceeds are earmarked for several key initiatives, including the kick-start of construction at its flagship Tumas project in Namibia following a final investment decision. This project stands out as a cornerstone in Deep Yellow’s portfolio, promising to usher in an important greenfield conventional uranium project into production within the next three years.
Additionally, the funds will support the progression of organic growth projects, notably the execution of a definitive feasibility study for the Mulga Rock project located in Western Australia. Deep Yellow is also focused on exploring the upside potential at the Alligator River and Omohola projects, situated in Australia’s Northern Territory and Namibia, respectively. These endeavors reflect the company’s strategic vision to not only develop its existing assets but also to explore new opportunities that could enhance its project portfolio.
John Borshoff, CEO and Managing Director of Deep Yellow, expressed his enthusiasm for the support received, acknowledging it as a pivotal milestone for the company. The fundraising not only facilitates the advancement of the Tumas project but also strengthens the company’s position to proceed confidently with the development of two advanced uranium projects. Furthermore, it enables Deep Yellow to maximize the resource potential of its exploration projects, laying a robust foundation for growth and value creation.
In addition to project development, Deep Yellow remains vigilant in its search for strategic opportunities for value-accretive mergers and acquisitions. This proactive approach signifies the company’s ambition to not only expand its operational footprint but also to enhance its competitive edge in the uranium market.
The initiative taken by Deep Yellow to raise funds for its Australia and Namibia uranium projects underscores the company’s commitment to contributing significantly to the global uranium supply chain. As the world increasingly turns to clean energy sources, uranium plays a pivotal role in the transition towards nuclear power as a sustainable and reliable energy alternative. With this financial backing, Deep Yellow is poised to make significant strides in its contribution to this energy shift, aligning its operational goals with broader environmental and sustainability objectives.
Source: Mining Weekly
