Boss Energy (ASX:BOE) has provided a cash facility valued at US$3.6 million ($5.47 million) to enCore Energy (TSX-V:EU), extending the repayment date of its existing loan agreement to advance its joint venture Alta Mesa Uranium Project.
The original loan priced at US$10.4 million will now allow enCore to pay it back with the facility costs by 27 December 2025, unless it is able to complete a capital raise of minimum US$23.5 million.
Interest on drawn funds has increased to 10% per annum, in comparison to the previous 9% per annum rate enforced under the original Uranium Loan Agreement, with another 2% interest on any undrawn funds.
The original agreement enlisted Boss to loan 200,000 pounds of uranium to enCore, repayable in kind or cash dependent on the spot price at the date of the loan. At a price of US$100.54 per pound, enCore has currently repaid US$11.9 million of its debts to Boss with US$10.4 million outstanding.
Boss Energy has gained a parent company guarantee and first ranking security package over the project from the new facility. It also has the option to demand immediate repayment or become the manager of the project by converting outstanding debt into 51% interest.
Boss Energy Managing Director Duncan Craib says the company is pleased to extend this agreement with its joint venture partner to ramp up its Alta Mesa Project for uranium exploration with financial flexibility.
“With a strong balance sheet, and Honeymoon achieving key production milestones, Boss is in a favourable position to provide this facility to enCore,” Craib says.
“Importantly, the Facility has strong downside risk protections with a parent company guarantee, first ranking security package over Alta Mesa, and the ability for Boss to elect to convert its debt into a controlling stake in the JV in an event of default.”
Boss has seen a lot of attention on the S&P/ASX200 recently, closing with the lowest performing stocks by 5.86% yesterday as reported by Mining.com.au.
Today, this news appears to have bolstered the company’s share price to $4.19, representing a 0.24% increase from the previous trading session.
Boss Energy is an Australian uranium producer focused on its two projects, the Honeymoon Project in South Australia and the Alta Mesa Project in South Texas.
Write to Maddison Elliott at Mining.com.au
Images: Boss Energy
