- UUUU will pay off half of its debt in July, plans to be debt free by the end of 2020
- Expects to save about $350,000 in avoided interest
- Energy Fuels has focused on strategy to eliminate debt over the past several years with minimal impact to shareholders
Energy Fuels (NYSE American: UUUU) (TSX: EFR), the largest uranium mining company in the United States, plans to take a significant step forward in its strategy to reduce debt and further strengthen its balance sheet by redeeming half of its outstanding debt earlier than planned (http://ibn.fm/eAj5w). The company notified holders of the outstanding floating rate convertible unsecured subordinated debentures of its plans earlier this month.
“Energy Fuels is proud to announce that we are paying off half of our debt on July 14, 2020, and that we expect to become debt-free by the end of 2020,” said Energy Fuels president and CEO Mark S. Chalmers. “We are proactively managing our remaining debt to ensure we have the ability to pay it off on our own timing and terms and with minimal disruption. We believe it makes sense to redeem half of the Debentures now because the U.S.-Canada exchange rate is favorable, we have sufficient cash available, and we will avoid approximately US$350,000 in interest payments in 2020 by doing so. We will address the remaining Cdn$10,430,000 balance over the next several months when we think the timing is most appropriate.”
On July 14, 2020, UUUU will redeem the principal amount of Cdn$10,430,000, half of the outstanding Cdn$20,860,000 debentures, originally due Dec. 31, 2020. The debentures are redeemable for an amount equal to 101% of the principal due, plus accrued and unpaid interest thereon, up to but excluding the redemption date.
The plan calls for the debentures to be redeemed on a pro rata basis to the nearest multiple of Cdn$1,000 in accordance with the principal amount of the debentures registered in the name of each holder, or in such other manner as deemed equitable, subject to any applicable regulatory approvals. The record date for determining the holders of the debentures to be redeemed is slated for July 8, 2020. Following the partial redemption, Cdn$10,430,000 aggregate principal amount of the debentures will remain outstanding and shall continue to be subject to the terms of the indenture and remain listed on the Toronto Stock Exchange.
“Many junior uranium producers and developers in North America are currently incurring significant amounts of debt to fund exploration and development activities and to cover corporate overheads,” Chalmers said. “However, without sufficient cash flow, servicing this debt can become extremely burdensome and destructive to shareholder value. Instead, Energy Fuels has focused on a strategy to reduce our debt load over the past several years, including paying off our debt to the State of Wyoming in 2018, all with minimal impact to our shareholders. Furthermore, we do not expect to incur more debt in the future without a clear, short-term path toward positive cash flow. We will continue to manage all aspects of our business proactively, including maintaining our position as the leading U.S. uranium producer, advancing our exciting rare earth initiatives, and maintaining the other significant aspects of our business plan, including our significant inventories of uranium and vanadium.”
Based in Lakewood, Colorado, Energy Fuels holds three of America’s key uranium production centers: the Nichols Ranch (“ISR”) project in Wyoming, the Alta Mesa ISR Project in Texas, and the White Mesa Mill in Utah — the only conventional uranium mill operating in the U.S. today with a licensed capacity of more than 8 million pounds of U3O8 per year. With an asset portfolio that boasts more uranium production facilities, in-ground resources, and production capacity than any other producer, Energy Fuels is in a unique position to take charge as the leading producer of uranium in an era of viable transformation of the U.S. nuclear industry. Energy Fuels is also making significant progress in entering the U.S. rare earth processing business.
For more information, visit the company’s website at www.EnergyFuels.com.
NOTE TO INVESTORS: The latest news and updates relating to UUUU are available in the company’s newsroom at http://ibn.fm/UUUU