Energy Fuels to redeem half of C$20.86M debentures outstanding

Energy Fuels Inc (NYSEAMERICAN:UUU) (TSE:EFR) has told holders of its floating rate convertible unsecured subordinated debentures that it will redeem the C$10.43 million principal amount of the C$20.86 million debentures outstanding. 

The debentures are redeemable for an amount equal to 101% plus accrued and unpaid interest thereon, up to but excluding the rededemption date of December 31, 2020. 

Following the partial redemption on July 14, C$10,430,000 will remain outstanding and will be subject to the terms of the indenture and remain listed on the Toronto Stock Exchange.

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The debentures will be redeemed on a pro-rata basis to the nearest multiple of C$1,000 in accordance with the principal amount of the debentures registered in the name of each holder. The record date for determining the holders of the debentures to be redeemed is July 8.

“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 CEO Mark Chalmers in a statement Thursday.

“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 US-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.”

He added: “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. 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.” 

In addition to uranium, Energy Fuels is getting in on the rare earth elements (REEs) market with its White Mesa Mill, the only conventional uranium mill operating in the US today.

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Story by ProactiveInvestors