Ucore Rare Metals Completes Final Convertible Debenture Conversion

Ucore Rare Metals Inc. (TSXV: UCU, OTCQX: UURAF) announced on September 3, 2025, the automatic conversion of its last $1.1 million in convertible debentures into equity. This significant financial event was triggered after the company's common shares traded at a closing price of $2.20 or more on the TSX Venture Exchange for 20 consecutive trading days, culminating on September 2, 2025. As a direct result of this automatic conversion, Ucore issued 1,222,219 units, effectively eliminating all outstanding debenture obligations.

Mechanics of the Debenture Conversion

The debentures, originally issued in May 2020 at a price of $1,000 per debenture, bore an annual interest rate of 7.5%. The terms were subsequently amended in 2024, establishing a maturity date of January 31, 2026, and an amended conversion price of $0.90 per unit. Each unit comprised one common share and one-half of a common share purchase warrant. These warrants are exercisable at a price of $1.30 per share until the debentures' original maturity date of January 31, 2026. Prior to this automatic conversion, approximately 1,700 debentures had already been converted or repaid since May 2020. Notably, a portion of the automatically converted debentures, specifically 10 with a principal amount of $10,000, were held by Ucore's Chairman and CEO, Pat Ryan.

Market Reaction and Financial Implications

The completion of this conversion marks a positive development for Ucore by strengthening its balance sheet through the elimination of $1.1 million in debt and the associated 7.5% annual interest payments. This reduction in debt obligations enhances the company's financial flexibility and frees up capital that would otherwise be allocated to servicing debt. The sustained high share price that triggered the conversion reflects strong market confidence in Ucore's performance and future prospects.

However, the conversion also introduces a degree of dilution for existing shareholders. The issuance of 1,222,219 new common shares, along with 611,108 warrants, increases the total outstanding share count. As of a recent report, Ucore had 94.59 million shares outstanding, an 8.14% increase year-over-year, which will be further augmented by the shares from this conversion. While the immediate impact of dilution can exert downward pressure on per-share metrics, the overall reduction in financial risk and improved capital structure are generally viewed favorably by investors.

Broader Strategic Context

This financial restructuring aligns with Ucore's long-term strategic vision to establish itself as a leading advanced technology company within the rare-earth and critical-metal resources sector. The enhanced financial flexibility is crucial for allocating capital towards key projects aimed at disrupting China's dominance in the North American Rare Earth Element (REE) supply chain. Ucore's near-term plans include the development of a heavy and light rare-earth processing facility in Louisiana, with subsequent strategic metal complexes slated for Canada and Alaska. Longer-term, the company remains focused on its 100% controlled Bokan-Dotson Ridge Rare Heavy REE Project in Southeast Alaska. The ability to fund these capital-intensive development projects without significant debt pressure is expected to accelerate their progress, contributing to national economic and strategic security by fostering domestic REE processing capabilities.

Outlook

Moving forward, Ucore is poised to continue focusing its resources on its strategic development initiatives. The market will closely monitor the company's progress on its key projects and the potential exercise of the 611,108 outstanding warrants, which could provide additional capital inflow. The conversion of these debentures underscores a pivotal moment for Ucore, solidifying its financial foundation as it pursues its ambitious goals in the critical minerals landscape. The reduced debt burden and bolstered equity base position the company with greater resilience and capacity for future growth in a strategically vital sector.