How Will Peninsula Energy’s A$69.9M Raise Reset Its Uranium Ambitions?
Peninsula Energy Limited launches a fully underwritten A$69.9 million equity raising to support the ramp-up of its Lance uranium project in Wyoming, alongside a strategic operational reset and leadership overhaul.
- Fully underwritten pro-rata entitlement offer and two-tranche placement
- Equity raise targets A$69.9 million to fund Lance Project ramp-up and wellfield development
- Significant leadership changes and operational reset following low pH ISR challenges
- Termination of five uranium sales contracts to realign production strategy
- Major institutional support including Tees River Uranium Fund and Davidson Kempner
Equity Raising to Propel Lance Project Restart
Peninsula Energy Limited (ASX, PEN) has announced a fully underwritten equity raising comprising a pro-rata accelerated non-renounceable entitlement offer and a two-tranche placement, aiming to raise approximately A$69.9 million before costs. The capital raise is designed to fund the restart and ramp-up of production at the company’s flagship Lance uranium project in Wyoming, USA, which has faced delays due to operational challenges with its low pH in-situ recovery (ISR) mining method.
The entitlement offer allows eligible shareholders to subscribe for one new share for every share held at an offer price of A$0.30, representing a significant discount to the last closing price. The placement includes a first tranche of nearly 48 million shares and a second tranche of 25 million shares, the latter subject to shareholder approval.
Operational Reset and Leadership Overhaul
Following disappointing progress in bringing the Lance Project back into production using the low pH extraction method, Peninsula has undertaken a comprehensive operational reset. This includes revising production guidance, adjusting wellfield designs, and terminating five of six legacy uranium sales contracts to relieve delivery pressures and financial obligations.
Significant leadership changes have been implemented, with George Bauk appointed as Managing Director and CEO in January 2025, replacing the former CEO. The Board has also seen turnover, including the retirement of long-serving directors and the appointment of Keith Bowes, a uranium mining veteran, as a Non-Executive Director. These changes signal a strategic shift towards pragmatic, risk-considered development of the Lance asset.
Strategic Use of Funds and Institutional Support
The proceeds from the equity raising, combined with existing cash reserves and a US$15 million debt facility secured from Davidson Kempner, will be primarily allocated to ramping up production at Lance, advancing wellfield development in Mine Unit 4, funding termination payments under sales contracts, and progressing growth opportunities at the Dagger Project. The company also plans to reduce risks associated with future wellfield development at Kendrick.
Notably, Tees River Uranium Fund Limited has pre-committed to invest up to A$22.5 million across the placement and entitlement offer, positioning it as the company’s largest shareholder post-raise. Davidson Kempner’s involvement extends beyond debt financing, including detachable warrants and a commitment to subscribe for shares, underscoring strong institutional confidence.
Risks and Regulatory Considerations
Peninsula’s prospectus outlines a range of risks, including operational uncertainties related to the low pH ISR method, regulatory approvals, commodity price volatility, and the need for further capital. The equity raising is subject to shareholder approvals at upcoming extraordinary general meetings and ASX regulatory conditions. The company has also secured waivers and reliefs to facilitate the offer and subsequent trading of new securities.
While the reset plan and capital raise aim to position Peninsula for sustainable production growth, the company acknowledges the speculative nature of the investment and the inherent uncertainties in uranium mining and market conditions.
Bottom Line?
Peninsula Energy’s equity raise and operational reset mark a pivotal step in its quest to unlock the Lance Project’s potential, but execution risks and market dynamics remain key watchpoints.
Questions in the middle?
- Will shareholder approvals for the Tranche 2 placement and secondary issues be secured as planned?
- How quickly can Peninsula ramp up production to meet revised guidance amid technical and regulatory challenges?
- What impact will uranium market price fluctuations have on Peninsula’s financial sustainability post-raise?
