Uranium One Announces C$270 Million Financing and Formation of Strategic Relationship with Japanese Consortium

Uranium One Announces C$270 Million Financing and Formation of Strategic Relationship with Japanese Consortium

Uranium One Inc. said that it has entered into a subscription agreement with a corporation formed by The Tokyo Electric Power Company, Incorporated, Toshiba Corporation, and The Japan Bank for International Cooperation providing for the private placement of an aggregate of 117,000,000 common shares of Uranium One, for gross proceeds of approximately C$270 million.

Concurrently with the execution of the subscription agreement, Uranium One has also entered into a long-term offtake agreement and a strategic relationship agreement with the Japanese consortium, both of which will become effective upon closing of the private placement.

The offtake agreement provides the consortium with an option to purchase, on industry-standard terms, up to 20% of Uranium One’s available production from assets in respect of which Uranium One has the marketing rights.

Under the strategic relationship agreement, the Japanese consortium has the right to appoint two directors to the Uranium One board and a right of first opportunity to invest in any uranium mining asset or project which Uranium One may in its discretion decide to make available to third parties. This agreement also contains a standstill provision under which the consortium has agreed, subject to certain exceptions, not to acquire without Uranium One’s prior approval more than 19.95% of Uranium One’s issued common shares. The Japanese consortium has also agreed not to dispose of any significant portion of its Uranium One shares except by way of a broad market distribution or pursuant to certain other limited exceptions.

The rights granted under both the offtake agreement and the strategic partnership agreement are generally subject to the consortium continuing to meet certain equity ownership thresholds.

The private placement issue price of C$2.30 per share represents a 15% premium to the 20-day volume weighted average price of Uranium One common shares on the Toronto Stock Exchange. Upon closing of the private placement, the consortium will have a 19.95% equity stake in Uranium One.

Closing of the subscription agreement is subject to the receipt of certain regulatory approvals, including Toronto Stock Exchange approval, Australian Foreign Investment Review Board approval and Republic of Kazakhstan Ministry of Energy and Mineral Resources approval, and to other usual and customary closing conditions. Closing is expected to occur not later than March 31, 2009.

Jean Nortier, President and Chief Executive Officer of Uranium One commented, “Uranium One is very pleased to partner with such highly respected leaders in the global nuclear industry. We will benefit from the consortium’s knowledge and expertise in the nuclear industry, from its high level relationships in Kazakhstan and from its significant financial resources. The proceeds from the private placement, combined with Uranium One’s consolidated cash balance of approximately US$185 million at the end of January, will result in a solid balance sheet to fund our growth and development plans.”

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