Uranium firm ERA to raise A$880m at steep discount
Uranium mining company Energy Resources of Australia (ERA) on Wednesday announced an A$880-million capital raise to fund rehabilitation work at the Ranger project area, in Northern Territory, until the third quarter of 2027.
The capital raise at A$0.002 a share represents an 87.8% discount last Friday – the last day before a trading halt was instituted. Trading in ERA’s stock resumed on Wednesday and its share price fell sharply to A$0.009 a share.
In a business update earlier this week, ERA warned that it was likely to breach its minimum cash reserve of about A$50-million in the fourth quarter of the year and that it would deplete its cash resources by the end of the year or early in 2025.
The equity raise was deemed necessary to ensure ERA remained solvent.
ERA engaged more than 90 investors to determine their potential support, but 80% shareholder, Rio Tinto, was willing to provide a precommitment to support an equity raise.
ERA noted that court proceedings regarding the Jabiluka uranium deposit would not start until late October and that a judgment would only be handed down some time later.
The Federal Court recently stayed a government decision to not renew ERA’s lease for the high-grade Jabiluka deposit in the Northern Territory.
The proposed development of Jabiluka, which is surrounded by the world heritage-listed Kakadu rainforest, has been strongly opposed by the local Mirarr people.
On the federal government's advice, the Northern Territory government refused to renew ERA's Jabiluka lease last month.
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