U.S.-based uranium miner and explorer Uranium Energy (NYSE-MKT: UEC) recently lined up a US$7.1 million financing to support the growth of its South Texas exploration projects, mainly the Burke Hollow in situ recovery property in Bee County.
The company signed definitive agreements for the financing with three institutional investors on Oct. 18. The investors will buy up to 3.38 million units for US$2.10 apiece. Each unit consists of one share and 0.55 of a share purchase warrant, with each whole warrant exercisable within three years of closing at a price of US$2.60. The offering should conclude on or around Oct. 23, 2013.
The Burke Hollow property is located along the Goliad trend within the South Texas uranium belt. It is about 80 km southeast of the company’s central Hobson uranium processing plant. Earlier this year, the company published a National Instrument 43-101 report for Burke Hollow, demonstrating the project has an inferred resource estimate of 2.89 million lb U3O8 averaging 0.047% U3O8. It also hosts two exploration targets potentially containing between 1.8 million and 7.2 million lb U3O8 with an average grade range of 0.03% to 0.06% U3O8.
During fiscal 2013, the company drilled 179 exploration holes at Burke Hollow, bringing the total as of July 31, 2013, to 292 exploration holes or 41,800 metres.
Uranium Energy says only 30% of Burke’s 70.9 km2 land package has been explored to date. It plans to kick off an 80-hole delineation and extension drill program shortly. The Texas-focused miner has also initiated permitting work for Burke Hollow. It intends to submit a mine permit and radioactive material license application to the Texas Commission on Environmental Quality by early 2014.
The company says the US$7.1 million capital injection will further its efforts at Burke Hollow, as well as other exploration targets within trucking distances of its Hobson processing plant. “With the Hobson plant having a physical capacity of two million pounds per year processing, it is key that we advance the permitting and exploration of our projects to maximize the uranium output when higher uranium prices are realized,” said company president and CEO Amir Adnani in a release.
To advance its other nearby projects, the company secured a US$20 million credit facility with Sprott Resource Lending Partnership and CEF Limited in July 2013. Those funds will be used to develop the company’s Goliad in situ recovery project, and maintain its operating Palangana in situ recovery mine and Hobson facility, all in south Texas. The Goliad project is set to come online in fiscal 2014.
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