The Paladin Energy Ltd (ASX: PDN) share price is on ice today amid a capital raise to restart work at a uranium mine.
The uranium miner's shares were swapping hands for 79 cents apiece before grinding to a halt. In yesterday's trade, the Paladin Energy share price dropped 0.63%.
So why did Paladin Energy enter a trading halt?
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What did Paladin Energy announce?
The Paladin Energy share price was put on hold this morning due to a capital raise. This includes a fully underwritten institutional placement to raise $200 million. A non-underwritten share purchase plan will also take place to garner another $15 million.
New shares will be issued at 72 cents per share, an 8.9% discount on the last closing price of 79 cents. Funds from the capital raise will be used to restart the Langer Heinrich uranium mine in Namibia.
After the equity raise, Paladin expects to have pro forma cash of $259 million with no corporate debt.
Paladin says the equity raise will "de-risk" restarting operations at the mine and will also position the company well for more uranium marketing initiatives.
Paladin entered the trading halt prior to market open today pending the details of the capital raise.
Commenting on the news that's halted the Paladin Energy share price, company CEO Ian Purdy said.
With the strength of the company's existing uranium sales offtake with CNNC combined with the recent successful tender award and the continuing strong uranium market fundamentals, Paladin can now confidently work towards a formal commencement of the Langer Heinrich Mine restart project.
The extensive workstreams we have conducted reinforce our confidence in Langer Heinrich as a low risk, robust, long-life operation that is poised to take advantage of the improving uranium market conditions and deliver sustainable value creation for all of our stakeholders
Paladin recently agreed to sell historical mining information for the Agadez Project in Niger to Kopore Metals Limited (ASX: KMT). Shares in the company dropped 7% on 14 March, the day of this announcement.
Uranium sales tender award
Paladin also advised the market today it has received a uranium sales tender award. This will involve supplying uranium concentrates to a subsidiary of US-based Duke Energy Corporation.
The deal, subject to conditions, involves the supply of up to 2.1 million pounds of triuranium octoxide over six years from 2024. Paladin described this tender award as an "important step forward" in returning the Langer Heinrich mine back to production.
Paladin Energy share price snapshot
The Paladin Energy share price has exploded nearly 114% in the past year, while it has lost more than 10% year to date.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned 11% over the past year.
In the past week, Paladin shares have slumped more than 8%, while they have climbed nearly 3% in a month.
Paladin has a market capitalisation of about $2.1 billion based on the current share price.
