The 92 Energy Ltd (ASX: 92E) share price has come out of a trading halt today to backtrack during mid-morning. This comes after the uranium exploration company provided an update on its recent equity raise.
At the time of writing, 92 Energy shares are swapping hands for 75 cents, down 1.96%
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92 Energy completes placement
One catalyst for today's fall in the 92 Energy share price could be investor concerns over an impending share dilution.
According to its update, 92 Energy announced it has received firm commitments for its institutional placement to raise $7.15 million before costs. The company highlighted that it had strong support from several high-quality domestic and offshore institutional investors.
The offer will see approximately 9.93 million new ordinary shares issued at a price of 72 cents apiece. This represents a 5.9% discount to the last closing price of 76.5 cents on 23 September (before the trading halt).
92 Energy will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows up to an additional 15% of its total shares to be issued without shareholder approval.
The company will use the proceeds from the capital raise to progress its exploration activity at the Gemini Project. In particular, the funds will be allocated to the following:
- Major drill program at the Gemini Project to follow up the recent uranium discovery at the Gemini Mineralisation Zone (GMZ) in the Athabasca Basin
- Undertake exploration activities at the 92 Energy's other projects in the Athabasca Basin region
- General working capital.
Settlement of the new shares is expected to occur next Tuesday 5 October.
92 Energy managing director Siobhan Lancaster commented:
This Placement represents a significant milestone for the Company and provides important external validation for the recent discovery of uranium mineralisation at the Company's 100%-owned Gemini Project in the Athabasca Basin.
We look forward to the upcoming drilling program at Gemini which will assist us to determine the extent of the uranium mineralisation at the Gemini Mineralised Zone.
About the 92 Energy share price
Despite today's falls, 92 Energy shares have gained around 160% in the past 12 months. However, the company's share price is around 25% off its all-time high of $1.15 reached in mid-September.
Based on valuation grounds, 92 Energy presides a market capitalisation of around $29.5 million, with almost 40 million shares outstanding.
