Vimy Resources Limited (ASX:VMY, OTCQB:VMRSF) has received firm commitments for a $17 million placement to institutional and sophisticated investors.
Despite recent events impacting the global uranium sector, the placement was well supported by the company’s existing shareholders and several new Australian and overseas institutional investors seeking exposure to strategic uranium assets in Tier 1 jurisdictions.
Vimy will issue 100 million ordinary fully paid shares at 17¢ per share, representing approximately 9.5% of the shares currently on issue. The issue price of 17¢ is a 24.4% discount to the last close price of 22.5¢ on 3 March 2022 and a 11.3% discount to the 15-day volume weighted average price of 19.2¢.
The funds significantly bolster Vimy’s cash reserves and will be used across the Company’s two key assets including:
- Completing the Mulga Rock bankable feasibility study, including mining studies and base metal recovery test work;
- Advancing pre-development site works at Mulga Rock, including developing water infrastructure, communications tower and main camp;
- Commencing an extensive drilling program at the Alligator River Project in the Northern Territory, focused on resource definition and extension drilling at the Angularli deposit; and
- General working capital purposes.
“The past few days have been exceptionally volatile for the global uranium sector, given the events on Friday in Ukraine,” managing director and CEO Steven Michael said.
“The strategic value of uranium deposits in Tier 1 jurisdictions has never been more apparent and there are few near term development opportunities that meet those criteria.
“Vimy’s major shareholders and new institutional investors recognise the growing strategic value of both the Mulga Rock and Alligator River projects in Australia and Vimy’s development plans.
“The long-term fundamentals for uranium remain robust and this is reflected in the strong support from investors.
“The capital raising allows Vimy to be fully funded into 2023 when the company expects to have completed the BFS at Mulga Rock and commenced additional early works for project development.
“Vimy will also undertake the first major drilling program since 2019 at one of Australia’s premier uranium addresses at Alligator River in the Northern Territory, with the aim of increasing the existing high-grade Angularli resource of 26mlbs @ 1.3% U3O8.
“Having a strong balance sheet allows Vimy to approach the uranium contracting cycle in a much more strategic manner. Also, the potential to establish two uranium projects in Australia at this time of heightened geopolitical uncertainly cannot be underestimated.”