Paladin Energy intends to raise up to $37.2 million in a bid to cut costs and capitalise on growing demand in the uranium market.
The company plans to use the funds for working capital requirements, including care and maintenance costs at its African mines, exploration tenements costs and costs associated with the Langer Heinrich restart in Namibia.
It comes as Paladin expressed excitement about the state of the market despite spot uranium prices being at historic lows.
In a market outlook, Paladin pointed out that the nuclear power industry was consuming more uranium than pre-Fukushima levels and European and US utilities stockpiles were reducing.
This coincides with a reported decrease in exploration spend within the sector, with supply side projects reducing 90 per cent since Fukushima.
Paladin therefore expects the development of new mines will not be able match the growth, leading to the potential for a short-term price spike.
Demand for uranium is steadily increasing given the appeal of nuclear energy as a low cost, low emission energy source.
This will be supported by growth in the electric vehicle market, resulting in greater demand for electricity supply.
Paladin’s funding will take place via a placement to raise the $30.2 million, comprising of issuing shares at a price of 11.5 cents per share.
In addition to the placement, Paladin will undertake a share purchase plan to raise up to $7 million.