Energy Fuels to offer $550 million in convertible senior notes

DENVER - Energy Fuels Inc. (NYSE:UUUU) (TSX:EFR), currently valued at $3.82 billion and showing remarkable momentum with a 345% price return over the past six months according to InvestingPro data, announced Monday its intention to offer $550 million in convertible senior notes due 2031 through a private placement to qualified institutional buyers under Rule 144A of the Securities Act.

The uranium and rare earths producer, which maintains a strong balance sheet with more cash than debt, plans to grant initial purchasers an option to buy up to an additional $82.5 million in notes during a 13-day period after issuance. The notes will be senior unsecured obligations with semiannual interest payments and will be convertible into cash, common shares, or a combination at Energy Fuels’ discretion under certain conditions.

The company intends to use proceeds to fund capped call transactions, which would reduce potential dilution from note conversions. Remaining funds would support development of its Phase 2 rare earth separations circuit at the White Mesa Mill, advancement of the Donald heavy mineral sands project in Australia, and general corporate needs. With a healthy current ratio of 8.1, the company maintains strong liquidity to support these initiatives.For deeper insights into Energy Fuels’ financial health and growth prospects, InvestingPro subscribers have access to 17 additional ProTips and comprehensive financial analysis, including detailed Fair Value estimates and growth projections.

In connection with the offering, Energy Fuels expects to enter into capped call transactions with initial purchasers or their affiliates to offset potential dilution from note conversions.

The notes and any shares issuable upon conversion have not been registered under the Securities Act and cannot be offered in the United States without registration or an exemption. No notes will be offered in Canada.

The offering remains subject to market conditions and final acceptance from the Toronto Stock Exchange, according to the company’s press release statement.

Energy Fuels operates conventional and in-situ recovery uranium projects in the western United States and owns the White Mesa Mill in Utah, the only fully licensed conventional uranium processing facility in the country. While the company reported revenue growth of 42.7% in the last twelve months, analysts anticipate a sales decline in the current year, according to InvestingPro data.

In other recent news, Energy Fuels Inc. reported a notable rise in its stock after its U.S.-mined and processed rare earth elements were successfully manufactured into permanent magnets for electric vehicles and hybrids. The company confirmed that its high-purity neodymium-praseodymium oxide, produced at the White Mesa Mill in Utah, met quality assurance benchmarks and was used by South Korea’s largest manufacturer of drive unit motor cores. Additionally, Energy Fuels announced a significant collaboration with Vulcan Elements to establish a domestic supply chain for rare earth magnets, independent of China. Under the agreement, Energy Fuels will provide high-purity rare earth oxides to Vulcan in late 2025, with plans for long-term supply agreements.

Furthermore, Energy Fuels disclosed the planned departure of Executive Vice President Timothy J. Carstens, who will leave at the end of 2025. This decision was made due to operational changes within the company. In the broader uranium sector, stocks surged after U.S. Energy Secretary David Wright mentioned plans to enhance the national strategic uranium stockpile. Energy Fuels saw a 9% rise following these comments. However, nuclear and uranium stocks experienced a decline in premarket trading, with Oklo, Nano Nuclear Energy, and Centrus Energy seeing notable drops.

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