Why is this outperforming ASX 300 uranium stock crashing 12% on Friday?

S&P/ASX 300 Index (ASX: XKO) uranium stock Bannerman Energy Ltd (ASX: BMN) is getting smashed today.

Bannerman Energy shares closed on Wednesday trading for $3.95. The stock entered a trading halt yesterday pending the release of an announcement regarding a strategic investment in its Etango Uranium Project, located in Namibia.

Following the release of that announcement this morning, Bannerman Energy shares are changing hands for $3.49 apiece, down 11.7%.

For some context, the ASX 300 is down 1.1% at this same time.

Here’s what’s happening.

ASX 300 uranium stock sinks on JV funding deal

Investors are favouring their sell buttons after the ASX 300 uranium stock reported executing a binding investment subscription and joint venture documentation with CNNC Overseas Limited (CNOL).

The agreement covers the funding, development and operation of Bannerman’s Etango Uranium Project. At completion CNOL will invest up to US$321.5 million in the project.

CNOL is a subsidiary of Chinese-listed China National Uranium Corporation and part of integrated global nuclear utility, China National Nuclear Corporation (CNNC).

Bannerman said the agreement is the preferred project funding solution for Etango, offering the highest forecast risk-weighted value outcome and enabling debt-free construction of the Etango mine. CNOL will also purchase 60% of the Etango uranium production at market-based pricing terms.

But the ASX 300 uranium stock could be facing pressure, with CNOL taking a 45% interest in Bannerman UK, a subsidiary, Bannerman Energy, which in turn owns 95% of the Etango Project.

Bannerman Energy will retain 52.25% underlying economic ownership of Etango, while CNOL will hold 42.75%, with Namibian social welfare organisation One Economy Foundation continuing to hold a 5% loan-carried shareholding.

Bannerman expects the transaction to complete in mid-2026.

What did management say?

Commenting on the JV Etango funding deal that’s pressuring the ASX 300 uranium stock today, Bannerman Energy executive chairman Brandon Munro said, “The execution of this documentation represents the culmination of the extensive Etango funding workstream we have undertaken over the past two years.”

He added:

We believe that this transaction delivers the optimised finance solution for the development of Etango and provides ideal support to our broader aspirations in the uranium business.

By enabling the debt-free construction of Etango, this solution maximises flexibility and dramatically derisks the construction and ramp-up phases of project execution. It also delivers us a Tier-1 cornerstone offtake partner on genuine and market terms, ensuring Bannerman remains strongly exposed to future uranium price upside potential.

As for the offtake agreement, Munro noted:

Importantly, the residual 40% of Etango offtake will be independently marketed by Bannerman, with strict confidentiality ring-fencing arrangements in place, and strengthened by the flexibility embedded in the cornerstone offtake with CNOL.

CNUC vice president Feng Li concluded:

We are confident that the synergy created between our technical capabilities, uranium demand profile, operational experience, and Bannerman’s expertise and insight in the industry will position Etango to evolve into the next successful uranium mine in Namibia.

With today’s intraday fall factored in, shares in the ASX 300 uranium stock remain up 19.9% over 12 months and up 98.8% since its April lows.

The post Why is this outperforming ASX 300 uranium stock crashing 12% on Friday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.