Peninsula Energy Ltd (ASX: PEN) (OTCMKTS: PENMF) (FRA: P1M) has received commitments from institutional and high net worth investors for A$13.4 million through a share placement at 15 cents per share.

A share purchase plan (SPP) will be offered to eligible shareholders to raise up to a maximum of A$2 million at the same share price as the placement.

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.

Settlement is due in June 2021 and the uranium will be stored at the Cameco Facility in Ontario, Canada.

'Physical uranium provides upside'

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.

Peninsula managing director and CEO Wayne Heili said: 'The acquisition of physical uranium underpins our focus on the transition of the Lance Project to a low pH ISR operation.

'Adding physical uranium to our balance sheet provides significant flexibilities and potential upside as we move towards the restart of operations.

'Importantly, holding uncommitted uranium inventories at a time when there is a strong and continued push by the United States Government to support nuclear power generation and the domestic production of critical minerals like uranium, enhances our ability to successfully participate in expanding market opportunities.'

Long-term outlook

A working inventory of uranium also creates flexibility in securing the supplementary offtake arrangements required for a restart and efficiencies in managing the company's current long-term sales contract book.

Peninsula is already in a unique position for a uranium junior with long-term sales contracts extending until 2030 at prices significantly above current levels.

Uranium purchase agreements have already been arranged to provide material for the earlier of the existing sales commitments.

The company forecasts realising a net cash margin of US$7 million to US$8 million in 2021 and US$8 million to US$9 million in 2022.

Placement details

The company will issue a total of 89,335,163 fully paid ordinary shares (10% of current issued capital) at an issue price of 15 cents per share to raise A$13.4 million before costs.

Placement shares are expected to be issued on or around Thursday, June 3, 2021, under the company's Listing Rule 7.1 placement capacity and is, therefore, not subject to shareholder approval.

The issue price represents a discount of 19% to the last closing price on May 25, 2021, of 18.5 cents and a 13% discount to the 20-day volume-weighted average price of 17.2 cents prior to May 25, 2021.

Canaccord Genuity (Australia) Limited and Shaw and Partners Limited acted as joint lead managers to the placement.

Share purchase plan details

The SPP is expected to be open to eligible Peninsula Energy shareholders as of 5:00pm (Perth time) on the record date of Thursday, May 27, 2021, and whose registered address is in Australia and New Zealand.

Eligible holders will be invited to invest up to a maximum of A$30,000 per shareholder in the SPP, subject to any scale back, to raise up to a maximum of A$2 million (or around 13,333,333 shares).

The proceeds from the SPP will be used for corporate purposes and working capital.

Contact:

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