Uranium Resources, Inc. (NASDAQ: URRE) announced this morning that it entered into a private placement based on the closing prices yesterday after the close. While it does not imply that BHP Billiton Ltd. (NYSE: BHP) is part of this, there is a tie in at the end about an existing acquisition that the company is involved in.
The company is raising north of $14.3 million in gross proceeds before placement fees. The sale of 3,295,599 shares was placed at $4.34 per share. That represents a 10% discount to the closing price. The company also gave up warrants to purchase 988,680 shares of common stock at $5.78 per share, which represents a 20% premium to yesterday’s closing price.
The warrants expire 60 months after issuance. There are also some ratchet warrants tied that have a 12-month expiration from issuance. These are immediately exercisable if the company sells additional shares at an implied rate of under $4.34 and there are additional terms and conditions to these.
The use of proceeds will be used for the acquisition, permitting, exploration and development of additional uranium properties located in Texas in an effort to extend annual production in 2010 and 2011 at the current rates and for general corporate purposes.
The company is in conversation with its advisers and BHP Billiton Ltd. (NYSE: BHP) to discuss the financing of the acquisition of Rio Algom Mining LLC, which these funds raised here will not be used for.
You can join our open email distribution list to hear about other secondary offerings, IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.
Shares of Uranium Resources are down 9% at $4.38 in early trading. Prior to any implied dilution from this deal, the company has a market cap listed as roughly $229 million.
Jon C. Ogg
May 14, 2008
Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.