Deep Yellow Limited (ASX: DYL) shares are avoiding the market selloff.
In afternoon trade, the ASX 300 uranium stock is up 4% to $1.21.
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Why is this ASX 300 uranium stock climbing?
Today's gain appears to have been driven by the release of an announcement relating to its capital raising.
According to the release, the company has confirmed that tranche one of its placement has been successfully completed.
This has seen the ASX 300 uranium stock issue 114,706,334 ordinary fully paid shares to qualified, institutional, sophisticated, and professional investors at a price of $1.225 per new share.
This is a premium to where its shares were trading yesterday and will raise approximately $140.5 million before costs.
Why is raising funds?
A significant portion of the proceeds will be used to advance the development of the Tumas Project. This includes the commencement of construction post final investment decision (FID) and securing debt financing.
In addition, funds will be used to advance the company's organic growth projects. This includes the revised definitive feasibility study for the Mulga Rock Project and pursuing significant exploration upside potential at both the Alligator River Project in Northern Territory and the Omohola Project in Namibia.
Finally, the ASX 300 uranium stock will also be progressing its inorganic growth strategy via value-accretive M&A through the assessment of targeted opportunities.
Commenting on today's news, the company's CEO, John Borshoff, said:
It is worth reiterating that the Placement, commencing with the completion of this Tranche 1, puts Deep Yellow in a strong financial position, ready to take on the next phase of the Company's growth. With our strong positioning, I feel shareholders will benefit greatly while we are building Deep Yellow into a company that I believe will become highly significant on the global uranium supply scene.
We are confident in completing Tranche 2 of the Placement following a general meeting in or around late April 2024, and raising a further A$30M from the Share Purchase Plan, which will allow eligible shareholders to participate in this capital raising.
