Peninsula capitalises on strong uranium demand

Uranium company Peninsula Energy announced on Tuesday that its $10 million securities purchase plan had closed significantly oversubscribed, yielding $33.7 million from more than 2,000 investors. 

The news follows the company's plans last November to tap investors for $60 million via a deeply-discounted placement, in a bid to restart operations at its Lance uranium project in Wyoming, US. 

Peninsula received binding commitments from investors to raise $50 million, through an offer price of 7.5 cents per share.

Additionally, it launched a securities purchase plan at the same offer price of 7.5 cents per share, coupled with one free attaching option exercisable at 10 cents per share for every two SPP shares accquired. 

As of 2.50pm AEDT, Peninsula shares were up 7 per cent, trading at 11.7 cents per share. 

“On behalf of the company, I would like to thank all participating shareholders for their strong support of the SPP to complete the capital raise of sixty million dollars," Peninsula's managing director and chief exective officer Wayne Heili said.

"Peninsula is strategically positioned to capitalise on the increasing demand and prices for uranium. We remain on track and on budget for restart of dry yellowcake production by the end of 2024.”

Yellowcake is formed after uranium ore is crushed and soaked in sulphuric acid. Once each piece has dried and been purified, it turns yellow and contains up to 90 per cent uranium. 

Between 2000-2007, uranium spot prices rose from $US10-140 per pound, which remains a record. They fell sharply four years later, following the Fukushima nuclear disaster in Japan. 

However, prices hit a 16-year high in 2023 on the back of supply issues, demand from China, and commitments by 22 countries - including the US, UK and France - to triple nuclear energy by 2050 at the COP28 world climate action summit in the United Arab Emirates. 

Last week, the uranium spot price hovered above the $US100/pound mark, and last traded at $US99.75/pound. Some analysts are predicting this upward trend will continue throughout 2024 via either a gradual rise or sharp spike at the end of the year. 

Given the global demand and supply, Australian companies could be set to benefit, given the country has the largest uranium reserves in the world. 

On January 24, Subiaco-based uranium explorer Bannerman Energy told the market it was considering a variety of funding options to add value to its flagship Etango project in Namibia, while Toro Energy also recently successfully completed a $12.3 million capital raise, in a bid to expand its Wiluna uranium project, located in Western Australia's north.