Mundine Uranium shares fall
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Mundine Uranium shares fall

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A uranium exploration company run by businessman Warren Mundine has seen its shares plunge after its auditor warned it was facing bankruptcy.

More than $60 million has been wiped off the value of ASX-listed company Aura Energy since its auditor lifted a red flag — and a subsequent emergency equity issue left new investors with a big loss.

Company documents show that on March 15, the auditor of Aura Energy — a company that says it has “major uranium projects” in “Africa and Europe” — warned that there was “material uncertainty” about whether the company would be able to remain solvent.

Aura Energy made a loss of $9.79 million in the 18 months to December 31, and its cash balance was just $5.86 million.

Shares in the company — which are not covered by any analysts or stockbrokers — immediately fell 33% to 16.5 cents.

Aura Energy has raised capital to stave off insolvency, but shares sold in an offering just six weeks ago at 18c closed at just 13.5c yesterday.

Since January – as Australia has been gripped by a fierce debate over nuclear power – Aura Energy’s share price has halved.

“Aura Energy’s share price has halved since January”

Mundine, who was appointed a director of Aura Energy in December 2021, is a strong supporter of nuclear power and previously served as a director of the Australian Uranium Association.

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Mundine Uranium shares fallMundine Uranium shares fall

Aura Energy share price since January. Source: Market Index

Aura Energy’s troubles follow the failure of a planned $10 million public offering in April of Mundine’s “mineral exploration” company, Fuse Minerals.

Mundine’s company was forced to abandon plans to list on the ASX after failing to raise enough funds despite extending its fundraising period more than eight-fold – from two weeks to more than four months.

Fuse Minerals has never made a cent and has never drilled a single well.

Mundine was one of the two main faces of the No campaign against last year’s Indigenous Voice referendum in Parliament, leading a campaign against the so-called “elites”.

He repeatedly declined to comment when contacted by The Klaxon.

Mundine posts on social media on April 29. Source: Twitter/X

Company documents show that Aura Energy suspended trading on March 15 and three days later its financial statements for the six months to December 31 were published.

The company lost $2.99 ​​million in the six months, which was a fraction of the $6.80 million loss it suffered in the fiscal year to June 30, 2023.

In its half-year report, Aura Energy’s auditors, Hall Chadwick, said there was a “material uncertainty that may cast significant doubt” on the company’s “ability to continue as a going concern”.

In the report, Aura Energy executives say the company is “dependent on further capital raises or external financing” to stay afloat.

Sea of ​​red ink – Aura Energy share price performance. Source: Market Index

“Because the Group is in the exploration stage and is not generating cash flows from operating activities, the Group is dependent on further capital raisings or external financing to sustain its operations, which creates a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern,” the directors said.

On March 18 — the same day it released its half-year financials — Aura Energy announced it had completed a “successful placement” in which it raised $16.2 million from “professional and sophisticated investors” by issuing 90.2 million shares at 18 cents per share.

The company would also raise $2 million from public investors, also at 18 cents per share, for listing on the ASX on May 30.

In both increases, for every four shares purchased there were also three ‘free’ options with a strike price of 30c and an expiry period of two years. (That means they would be worth it if the Aura Energy share price exceeded 30c in the next two years.)

In advertising the public offering, Fuse Minerals said the price of 18 cents per share would be “a discount of 18.2%” to the 22 cents per share at which the company was trading on the day the offering was announced.

Moreover, the price of 18c per share represented a “discount of 23.5 per cent” to the average price at which the shares traded in the five days preceding the announcement of the offer.

On its public listing date on the ASX, 30 May, the company’s share price was 16.5 cents.

Yesterday they closed at 13.5c.

As of January 1, the company had 623 million shares outstanding at a price of 26.5 cents each, giving it a market capitalization of $165.1 million.

Yesterday, the market capitalization was $103 million, a decrease of $62.1 million.

The problems Aura Energy faces come amid a heated political debate over the future of nuclear power in Australia, with the federal opposition calling for nuclear power to be adopted despite it being significantly more expensive than renewable energy.

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Mundine and Senator Jacinta Price were the most visible faces of the No campaign against Indigenous Voice to Parliament, which was rejected in October.

Two weeks later, Mundine announced that he had been appointed chairman of Fuse Minerals and that the company intended to raise up to $10 million and list on the ASX.

Horn later revealed that Fuse Minerals held only one of the nine exploration licenses listed in the prospectus — and that its own “independent expert” had warned that the company was at risk of collapse.

As of January, Fuse Minerals had raised just $1.86 million, well short of the $6-10 million expected, and was legally obligated to return the money to investors seeking to exit.

On March 28, Fuse Minerals was forced to withdraw its offer entirely.

The No to Voice campaign was led by far-right lobby group Advance, which waged a campaign of aggressive attacks on the so-called “elites” it claimed were behind Voice.

In fact, as we have previously reported, the No campaign was funded by a handful of extremely wealthy individuals, many of whom had deep ties to the mining and fossil fuel sectors.

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