URANIUM ROYALTY ANNOUNCES CLOSING OF BOUGHT DEAL FINANCING

Rhea-AI Summary

Uranium Royalty Corp. (UROY) closes bought deal financing, selling 6,724,600 common shares at US$3.40 per share, generating US$22,863,640. The net proceeds will fund future royalty acquisitions and physical uranium purchases. The Offering was led by Canaccord Genuity Corp., BMO Capital Markets, and H.C. Wainwright & Co., LLC. Uranium Energy Corp. acquired 1,047,614 Common Shares in the Offering.

Financial Analyst

The closure of Uranium Royalty Corp.'s bought deal financing represents a significant capital infusion, which is earmarked for future royalty acquisitions and physical uranium purchases. This strategic move can bolster the company's asset base and revenue potential in a market where uranium demand is projected to grow, driven by its role in carbon-free nuclear energy production. The participation of Uranium Energy Corp., an insider, in purchasing a substantial number of shares, may signal confidence in URC's growth prospects and strategic direction.

However, investors should be mindful of the dilutive effect of the additional common shares on existing shareholders. While the immediate liquidity benefits are clear, the long-term impact on share value will depend on the effectiveness of the investments made with the proceeds. The fact that the offering was made through a syndicate of reputable underwriters like Canaccord Genuity and BMO Capital Markets could be indicative of strong market support and a positive reception from institutional investors.

Market Research Analyst

URC's decision to bypass Québec in its offering may reflect regulatory complexities or strategic market considerations. The uranium market itself is subject to geopolitical tensions and supply uncertainties, which could affect URC's operations and stock performance. The exemption from formal valuation and minority shareholder approval requirements, while legal, may raise questions about corporate governance and minority shareholder interests. It's crucial for investors to monitor how these funds are allocated and the subsequent return on investment, as missteps could impact both market perception and the company's financial health.

Legal Expert

From a legal perspective, the transaction's compliance with Multilateral Instrument 61-101 and the exemption from certain requirements underscores the importance of understanding the regulatory framework governing securities transactions. The absence of a material change report 21 days prior to closing, justified by business expediency, is permissible but may raise concerns about transparency and due process among shareholders. It is essential for investors to consider the legal nuances of these transactions, as they can have material implications for shareholder rights and company valuation.

DESIGNATED NEWS RELEASE

VANCOUVER, BC, Feb. 9, 2024 /PRNewswire/ - Uranium Royalty Corp. (NASDAQ: UROY) (TSX: URC) ("URC" or the "Company") has closed its previously announced bought deal financing for a total of 6,724,600 common shares (the "Common Shares") sold at a price of US$3.40 per Common Share for aggregate gross proceeds to the Company of US$22,863,640 (the "Offering").

The Company plans to use the net proceeds of the Offering to fund future royalty acquisitions and purchases of physical uranium.

The Offering was made through a syndicate of underwriters led by Canaccord Genuity Corp., as lead manager and joint bookrunner, together with BMO Capital Markets, as joint bookrunner, and H.C. Wainwright & Co., LLC. The Offering was completed by way of a prospectus supplement dated February 6, 2024 and an accompanying base shelf prospectus dated July 20, 2023, in all of the provinces and territories of Canada, other than Québec, and in the United States pursuant a prospectus supplement dated February 6, 2024 and accompanying base shelf prospectus dated July 20, 2023, under an effective registration statement filed with the U.S. Securities and Exchange Commission under the Canada/U.S. multi-jurisdictional disclosure system (File No. 333-272534).  

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Common Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of that jurisdiction.

A copy of the prospectus supplement relating to the Offering and accompanying base shelf prospectus can be found in Canada under the Company's profile on SEDAR+ at www.sedarplus.ca, and a copy of the prospectus supplement and accompanying base shelf prospectus can be found in the United States on EDGAR at www.sec.gov.

Uranium Energy Corp. ("UEC"), an insider of the Company, purchased 1,047,614 Common Shares under the Offering.

The issuance of Offered Shares to UEC constitutes a related-party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The sale of Offered Shares to UEC is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of any securities issued to, nor the consideration paid by, UEC exceeded 25.0% of the Company's market capitalization. The board of directors of the Company has approved the Offering, the related party transaction with UEC and all ancillary matters. The Company did not file a material change report 21 days prior to closing of the Offering, as the aforementioned insider participation had not been confirmed at that time and the Company wished to close the transaction as soon as practicable for sound business reasons.

About Uranium Royalty Corp.

Uranium Royalty Corp. (URC) is the world's only uranium-focused royalty and streaming company and the only pure-play uranium listed company on the NASDAQ. URC provides investors with uranium commodity price exposure through strategic acquisitions in uranium interests, including royalties, streams, debt and equity in uranium companies, as well as through trading of physical uranium. The Company is well positioned as a capital provider to an industry needing massive investments in global productive capacity to meet the growing need for uranium as fuel for carbon-free nuclear energy. URC has deep industry knowledge and expertise to identify and evaluate investment opportunities in the uranium industry. The Company's management and the Board include individuals with decades of combined experience in the uranium and nuclear energy sectors, including specific expertise in mine finance, project identification and evaluation, mine development and uranium sales and trading.

Cautionary Note Regarding Forward-Looking Statements and Forward-Looking Information

Certain statements in this news release may constitute "forward-looking information", including those regarding the intended use of proceeds raised from the Offering. Forward-looking information includes statements that address or discuss activities, events or developments that the Company expects or anticipates may occur in the future. When used in this news release, words such as "estimates", "expects", "plans", "anticipates", "will", "believes", "intends" "should", "could", "may" and other similar terminology are intended to identify such forward-looking information. Statements constituting forward-looking information reflect the current expectations and beliefs of the Company's management. These statements involve significant uncertainties, known and unknown risks, uncertainties and other factors and, therefore, actual results, performance or achievements of the Company and its industry may be materially different from those implied by such forward-looking statements. They should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from such forward-looking information, including, without limitation, risks inherent to royalty companies, uranium price volatility, risks related to the operators of the projects underlying the Company's existing and proposed interests and those other risks described in filings with Canadian securities regulators and the U.S. Securities and Exchange Commission. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking information and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.

None of the TSX, its Regulatory Services Provider (as that term is defined in policies of the TSX) or the Nasdaq Stock Market LLC accepts responsibility for the adequacy or accuracy of this press release.

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SOURCE Uranium Royalty Corp.

FAQ

How many common shares did Uranium Royalty Corp. sell in the bought deal financing?

Uranium Royalty Corp. sold 6,724,600 common shares in the bought deal financing.

At what price were the common shares sold in the Offering?

The common shares were sold at a price of US$3.40 per share in the Offering.

What is the total gross proceeds generated from the Offering?

The total gross proceeds from the Offering amounted to US$22,863,640.

What will the net proceeds from the Offering be used for?

The net proceeds from the Offering will be used to fund future royalty acquisitions and purchases of physical uranium.

Who led the syndicate of underwriters in the Offering?

The syndicate of underwriters in the Offering was led by Canaccord Genuity Corp., BMO Capital Markets, and H.C. Wainwright & Co., LLC.

How many Common Shares did Uranium Energy Corp. purchase in the Offering?

Uranium Energy Corp. purchased 1,047,614 Common Shares in the Offering.

Is the sale of Offered Shares to Uranium Energy Corp. considered a related-party transaction?

Yes, the sale of Offered Shares to Uranium Energy Corp. is considered a related-party transaction.

Why was the Company exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 for the sale of Offered Shares to Uranium Energy Corp.?

The Company was exempt from the requirements as the fair market value of securities issued to Uranium Energy Corp. did not exceed 25.0% of the Company's market capitalization.