Uranium miner Denison Mines (DML-T, DNN-N) announced today that it will raise at least $82-million in a bought-deal financing, which executive vice president and chief financial officer, James Anderson, says will help the company pay down its $100-million debt.
Denison shares dipped 12%, or 28¢, to $2.11 on the news of the financing, which gives the syndicate of underwriters co-led by GMP Securities and Cormark Securities, a 14% discount to yesterday’s closing price.
The underwriters will buy 40 million Denison shares at $2.05 apiece with the option to buy another 6 million shares at the same price within 30 days of the closing of the offering. Gross proceeds of the financing could total $94.3 million.
Aside paying down the debt, Anderson said the company won’t be doing a lot.
“We are in our year of cutting back operations because of uranium prices and economic conditions,” Anderson said during a phone interview.
Denison will do a little exploration work, continue its mining operations in the United States and Saskatchewan, and finalize an offtake agreement with Korea Electric Power Corporation (KEPCO).
Under the deal KEPCO will buy 20% of Denison’s U3O8 production – between 510,000-690,000 lbs. U3O8 per year. KEPCO will also buy 58 million shares in a private placement, representing 19.9% of the company for $19.5 million (at $1.30 per share).
“We expect to be in a position to have all of it done by mid-June,” Anderson said of the KEPCO deal.
The GMP-Cormark bought-deal financing is expected to close around June 22.
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