Terra Uranium Ltd (ASX:T92) is raising $2.78 million via a flow-through share placement. Canadian 'flow through shares' provide tax incentives to those investors for expenditures which qualify as flow through critical mineral mining expenditures under the Income Tax Act (Canada).
Shares will be placed at A$0.278 per share, representing a 26% premium to the company’s last closing price of A$0.22. The flow-through shares will then be immediately on-sold through a block trade agreement to select high-quality institutional and sophisticated investors.
The FTS provisions enable Terra Uranium to significantly minimise the dilution of issued capital.
Terra Uranium executive chairman Andrew Vigar said, “We appreciate the continued support of our quality investors to now move to drilling our high quality 100% owned uranium targets in the Eastern Athabasca Basin, Canada.
“Following our IPO in September 2022, we have now been able to utilise the 'flow-through share' provisions under Canadian tax law to raise capital at a significant premium to the current share price which in turn minimises dilution to current shareholders. These funds will be fully applied directly to drilling at our Parker and Pasfield Lake Projects.”
Use of funds
The $2.78 million raised will be used to advance exploration and drilling at T92’s uranium projects in the Eastern Athabasca Basin, Canada, including diamond drilling at priority targets, prospecting, ground geophysics, drill logging and assaying and eligible staffing expenses and exploration costs.
Terra Uranium recently completed detailed exploration to define multiple high-quality drill targets on its Parker and Pasfield Lake projects, considered to have high uranium discovery potential.
The projects are characterised as robust co-incidentally stacked anomalies.
Coincident geophysical anomalies include strong ZTEM basement conductors, ANT velocity low at the unconformity, a basement magnetic susceptibility low, and strong VTEM conductivity in sandstone considered indicative of potential mineralisation at the target basal unconformity.
These are supported by uranium and very high helium values in shallow RC drilling.
Terra has finalised its preparation for diamond drilling.
It has brought in necessary consumables over the winter trails and ice roads for its maiden drilling program.
Further to this the Winter Camp Base Camp at Pasfield Lake is being transitioned to summer operations.
Capital structure
Once the FTS placement is complete, Terra’s capital will be as follows:
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