ASX-listed uranium junior Marenica Energy will undertake a capital raising totalling $1.7 million during 2017 to fund critical development activities.Marenica Energy’s capital raising will be undertaken in two parts; a placement to institutional and sophisticated investors totalling $951 200; and a non-renounceable rights issue offered to existing eligible shareholders seeking to raise $748 800.

The placement of 7 316 923 fully paid ordinary shares at an issue price of 13 cents per share to raise $951 200 is to professional and sophisticated investors and clients of Patersons Securities.

The placement was keenly sought by predominantly new investors including an investment fund, who are welcomed to the Marenica Energy’s register.

The placement will take place in two tranches. The first tranche of $569 000 will be placed under the Marenica Energy’s ASX Listing Rule 7.1 placement capacity.

The pro-rata non-renounceable rights issue will be offered on the basis of 1 new share for every 6.2 shares held by eligible shareholders at an issue price of 13 cents per share to raise up to $748 800.

Under the rights issue, Marenica Energy will issue up to a maximum of 5 760 000 new shares. The rights issue provides all eligible shareholders with an opportunity to subscribe for new shares at the same price as the placement.

The timetable and an offer document setting out further details on the rights issue will be issued to eligible shareholders in the coming weeks.

The current intention is that all directors will take up their full entitlements in the rights issue.

“The recent growth in interest in Marenica made it possible for the company to rely heavily on new shareholders to raise the required funds. While the share price remains well below our view of the value of the business, the directors also opted to provide our shareholders with the right to increase their shareholdings,” comments Marenica Energy MD, Murray Hill.

Paterson’s Securities is acting as lead manager for the placement and has been engaged to assist the company in placing any shortfall in the rights issue.

The new shares will rank equally in all respects with existing Marenica Energy fully paid ordinary shares.

Following completion of the first and second tranche of the placement and assuming a fully subscribed rights issue, the company expects to issue 13 076 923 new shares, increasing the total shares on issue to 44 558 162.

“We are delighted with the response from new investors to the company’s share placement, which we see as strong validation for U-pgrade and the role that it can play in the uranium industry,” states Marenica Energy’s chairman, Douglas Buerger.

“We are also pleased to offer the rights issue to existing eligible shareholders on the same terms as the placement, providing the opportunity to increase shareholdings in the company as it enters the next phase of critical development activities.”

The company will remain in voluntary suspension pending release of an announcement on the Marenica Uranium project scoping study.

Marenica Energy's principal project is the 75% owned Marenica uranium project in Namibia.

The company is currently focused on the development of its propriety U-pgrade technology.