American Uranium (ASX:AMU) has obtained binding commitments for a $1.235 million convertible loan note facility within its existing issuance capacity. The funds will support upcoming milestones at its Lo Herma In Situ Recovery (ISR) Uranium Project in Wyoming, US.
The funding will be used for hydrogeological testing and modelling, finalisation of a Scoping Study, and permitting activities at the project.
The unsecured facility comprises 18-month convertible loan notes featuring a 12% coupon, lender and company conversion rights, attached options, and participation rights in strategic transaction scenarios.
Under the terms, the conversion price is set at the lower of a 20% discount to the next qualifying capital raise or a 20% discount to the 30 trading day volume weighted average price (VWAP) immediately prior to conversion. A minimum conversion price of $0.065 applies. Lenders will receive four options for every dollar funded, exercisable at $0.16 and expiring on 30 June 2029.
CEO Bruce Lane says the facility was met with ‘strong’ support from existing shareholders and parties already familiar with the company.
“We appreciate the ongoing support from existing shareholders,” Lane says.
“The facility strengthens AMU’s ability to advance Lo Herma through key technical, study, and permitting milestones, while maintaining momentum toward the delivery of a construction-ready ISR uranium project in Wyoming.
“We believe the coming work programs will continue to enhance the project’s strategic relevance within the US uranium sector.”
Earlier this month, American Uranium announced that it increased Lo Herma’s total resource estimate by 16%. The resource now stands at 9.9 million pounds (Mlbs) of triuranium octoxide (U₃O₈), including a 72% increase in the indicated resource to 4.79Mlbs U₃O₈.
Based on the terms, ordinary lender conversion is restricted during the first six months unless tied to a qualifying capital raise or strategic transaction. After six months, lenders may convert if the 15 trading day VWAP reaches at least $0.095, while AMU can elect conversion if it reaches at least $0.11.
If a strategic transaction valued at $25 million or more completes and a lender elects repayment, the lender may receive a participation payment equal to 5% of net realised transaction proceeds. This is capped at 50% of the lender’s funded principal amount.
AMU notes completion remains subject to customary conditions, with a general meeting planned to seek shareholder approval for the options, shares issued in lieu of interest, and capacity to issue up to a further $1.3 million of convertible loan notes on identical terms.
CPS Capital Group is acting as lead manager and broker for this transaction.
American Uranium is focused on exploring uranium and vanadium at its flagship Lo Herma Project in Wyoming’s Powder River Basin.
Write to Paula Fabe at Mining.com.au
Images: American Uranium
