Ucore Rare Metals Inc. (TSXV: UCU, OTCQX: UURAF) has just completed the automatic conversion of the last $1.1 million of its convertible debentures into equity. This conversion was triggered after Ucore’s common shares traded at or above $2.20 for twenty consecutive trading days on the TSX Venture Exchange, which activated the conversion clause outlined in the debenture agreement. As a result, the company issued 1,222,219 units, marking the full conversion of all convertible debentures from the May 2020 private placement, meaning no debentures remain outstanding today.
Back in May 2020, Ucore issued a total of 2,800 convertible debentures at a price of $1,000 each, carrying an annual interest rate of 7.5%. These debentures had their terms amended in 2024, with the maturity date extended to January 31, 2026. After the amendment, the conversion price was set at $0.90 per unit, where each unit includes one common share and half a warrant. Each full warrant allows the holder to purchase an additional common share at $1.30 per share until the maturity date. The automatic conversion clause meant that as soon as the company’s share price sustained a close above $2.20 for 20 straight days, the outstanding principal of the debentures would be converted into shares, which was achieved on September 2, 2025.
Prior to this automatic conversion, holders had already converted or repaid approximately 1,700 convertible debentures, leaving $1.1 million in debentures to be converted now. This final conversion led to the issuance of 1,222,219 common shares along with 611,108 warrants. Some of these convertible debentures were held by related parties, including Pat Ryan, Ucore’s Chairman and CEO, who owned 10 debentures valued at $10,000. The transaction with Mr. Ryan falls under related party transactions according to Canadian securities regulations but does not require formal valuation or minority shareholder approval as it does not exceed 25% of the company’s market capitalization.
This milestone clears the company’s outstanding convertible debts and brings more equity into circulation, which will likely influence the company’s capital structure moving forward. Ucore’s business has been focused on rare-earth and critical metals, including projects aimed at extraction, beneficiation, and separation technologies. Their strategic vision involves developing advanced metal separation technologies and expanding production capabilities, particularly disrupting supply chains dominated by China. Among their key projects is the development of rare-earth processing facilities in Louisiana, with further plans for sites in Canada and Alaska, as well as their wholly owned Bokan-Dotson Ridge rare heavy rare earth project in Southeast Alaska.
The successful conversion signals growing investor confidence in Ucore’s stock and its underlying business prospects. With the convertible debt removed and new equity issued, the company has cleared a significant financial milestone that supports their ongoing growth initiatives in the rare metals sector, a market of increasing strategic importance globally.
As Ucore continues its work in rare earth and critical metal technologies, this conversion event simplifies their balance sheet and aligns their capital base with investor optimism shown by recent sustained share price strength.
