A-Cap Resources (ASX:ACB) will raise $5.8 million through a placement to raise $1.32 million from institutional investors based in the United Kingdom and a non-renounceable, entitlement offer to shareholders at $0.055 per share.
The Letlhakane Uranium Project in Botswana owned by A-Cap ranks as one of the largest under-developed uranium deposits in the world.
Interestingly, the rights issue will be fully underwritten by Ansheng Investment Company Ltd, an entity which is controlled by Angang Shen, a director of the A-Cap.
While the placement will be undertaken by Arlington Group Asset, an entity which is associated with Richard Lockwood, a director of the company.
The vote of confidence by each director is a bullish for the company and demonstrates the confidence slowly but surely returning to advanced uranium projects as signs are increasing of increased demand for U3O8 initially due to the imminent likely restart of nuclear power generation in Japan.
The funds received from the placement will enable critical path drilling, process design and environmental work to
Funds will also be used to advance the Company's coal projects following positive reports received from independent consultants on the development potential of these assets.
A total of 81,824,282 new shares will be offered in an issue of one for every 3.5 shares held at $0.055 per share to raise approximately $4.5 million.
The Issue Price is at a 5.6% discount to the volume weighted average of the closing price for the past 15 trading days.
Funds raised from the capital raising will be used to enable the company to complete further feasibility work necessary for a mining licence application in the first half of next year at the Company's Letlhakane Uranium
Project in Botswana.
Letlhakane Uranium Project
Letlhakane is one of few global uranium projects capable of commencing production within the next three years and hosts a resource of 308 million pounds of U3O8 along with separate strata that contain 107.3 million tonnes of thermal coal.
Key shareholders (inc.) Praetorian Resources and China Growth Minerals that account for 30.6% are supportive of progressing Letlhakane.
Scoping study confirmed favourable project economics
In February of 2013 the Company completed an internal Scoping Study that evaluated a shallow open pit mining operation of less than 75 metres in depth, and heap leach process route to produce 3 million pounds of uranium per year over a mine life that exceeds 25 years.
Raising up $5.8 million in the current market is a bullish sign and demonstrates the advanced nature of the Letlhakane uranium project with separate strata that contain 107.3 million tonnes of thermal coal.
That it ranks as one of the largest under-developed uranium deposits in the world is significant and funds raised will progress feasibility work necessary for a mining licence application.