Marenica Energy (ASX: MEY) is offering shareholders the opportunity to subscribe for additional new shares under its entitlement issue to raise around A$3.2 million for further metallurgical testwork at its Marenica uranium deposit in Namibia.
The company is making available a shortfall facility to allow shareholders to subscribe for additional shares beyond the shares they would be eligible for under the 1 for 2 non-renounceable issue.
This facility will take shares that may be available from shareholders not taking up their full entitlements and allocate them to those who have applied for additional shares.
Marenica is issuing up to 249.3 million shares at $0.013 per share to fund its activities, which include the assessment of whether screening, de-sliming, gravity separation, magnetic separation and/or flotation can be applied to upgrade the yield from the Marenica uranium deposit.
Importantly, the entitlement issue will be fully underwritten by existing substantial shareholder Hanlong Energy.
The offer is available to all shareholders registered on 18 April 2012 and will close on 7 May.
Detailed mineralogical testwork conducted as part of a technical review of the project show that the Marenica deposit could be open to processing using techniques not typically used in the recovery of uranium.
Mineralisation at Marenica has been found to have a number of distinctive characteristics, which could be conducive to conventional metallurgical processes used extensively in other industries.
If these techniques can be applied successfully to ore from Marenica, the uranium concentration will be significantly improved, reducing the amount of material to be treated and lowering the capital and operating costs.
The Marenica deposit is located in a world-class uranium province in Namibia, host to Rio Tinto's (ASX: RIO) Rossing Uranium Mine and Paladin Energy's (ASX: PDN, TSX: PDN) Langer Heinrich Mine.
It is located about 90 kilometres northeast of Swakopmund in Namibia, and hosts a JORC Resource of 276 million tonnes at 94 parts per million for 57 million pounds of contained uranium.