VANCOUVER, BRITISH COLUMBIA and BRUSSELS, BELGIUM--(Marketwire - June
03, 2008) - POWERTECH URANIUM CORP. ("Powertech" or the "Company")
(TSX: PWE)(FRANKFURT: P8A) and SOCIETE BELGE DE COMBUSTIBLES
NUCLEAIRES SYNATOM SA ("Synatom") are pleased to announce that they
have entered into a Private Placement Agreement (the "Agreement")
pursuant to which Synatom has agreed to make a Cdn.$9 million
strategic investment in the Company by way of a private placement of
units. The Company intends to use the proceeds of the private
placement for working capital and to advance its mineral properties
towards production.
Private Placement Terms:
Under the terms of the private placement, at closing, the Company
will issue 6 million units of the Company to Synatom, at a price of
Cdn.$1.50 per unit, for aggregate proceeds of Cdn.$9 million. Each
unit will consist of one common share (each, a "Share") in the
capital of the Company and two share purchase warrants, with the
warrants exercisable at an exercise price of Cdn.$2.00 per Share,
subject to adjustment. The warrants, which will be subject to, among
other things, certain anti-dilution provisions, will be issued in two
series as follows:
- the first series of 6,000,000 warrants may be exercised at any time
until the earlier of: (i) 10 days following the date that the Company
files certain specified permit applications for both the Centennial
and the Dewey-Burdock projects of the Company (with a minimum
duration of 6 months); and (ii) 12 months following the closing of
the private placement; and
- the second series of 6,000,000 warrants may be exercised at any
time until the earlier of: (i) 10 days following the date that the
Company has obtained the permits required to construct and operate
either the Centennial or the Dewey-Burdock project; and (ii) 24
months following the closing of the private placement.
Anti Dilution and Governance Rights:
Pursuant to the Agreement, the Company has granted Synatom certain
anti-dilution and pre-emptive rights that apply so long as Synatom
continues to own no less than 15% of the outstanding Shares
(calculated on a non-diluted basis). In connection therewith, Synatom
will, subject to any regulatory and applicable shareholder approval
requirements, be entitled to: (i) maintain its rateable ownership of
the Shares, if the Company proposes to issue any further Shares or
any securities convertible into Shares; and (ii) increase its
ownership to 33.34% of the outstanding Shares (calculated on a fully
diluted basis) if, after the exercise of all of the warrants, Synatom
owns less than 33.34% of the outstanding Shares (calculated on a
fully diluted basis).
In addition, pursuant to the Agreement, the Company has granted
Synatom certain governance rights that apply so long as Synatom owns
not less than 10% of the outstanding Shares (calculated on a
non-diluted basis). In connection with these governance rights,
Synatom will have the right to nominate directors to the board of
directors of the Company (and that of its wholly-owned subsidiary
Powertech (USA), Inc.) in proportion to its then proportionate
interest of Shares and the Company will cause such individuals
nominated to be elected or appointed to the Board.
Right to Purchase Uranium:
In connection with the private placement, in the event that the
Company produces uranium for sale, the Company has also granted
Synatom an option to purchase a certain quantity of uranium from time
to time (based on Synatom's then percentage ownership interest in the
Company) on the terms sold to third parties, exercisable so long as
Synatom continues to own no less than 15% of the outstanding Shares
(calculated on a non-diluted basis).
Closing and Resulting Ownership of Synatom:
The closing of the private placement, which is currently expected to
occur on or about June 4, 2008, is subject to customary closing
conditions, including approval from the Toronto Stock Exchange.
Synatom currently owns 4,890,000 Shares representing approximately
9.9% of the outstanding Shares. Immediately following the private
placement, Synatom will own 10,890,000 Shares (excluding Shares
issuable upon the exercise of the warrants) representing
approximately 19.6% of the outstanding Shares. If all of the warrants
are exercised for Shares, Synatom will own Shares representing
approximately 33.9% of the outstanding Shares. The Shares and
warrants will be acquired by Synatom as a strategic investment and
otherwise for investment purposes. Synatom may increase or decrease
its investment in Powertech from time to time, depending on market
conditions or any other relevant factors.
Shareholder Approval and Other Related Transaction Agreements:
The Company will be seeking shareholder approval at a special meeting
(the "Special Meeting") of shareholders of the Company to be held on
or about July 15, 2008, for a special resolution (the "Special
Resolution") approving the warrants and the pre-emptive rights
granted to Synatom. In connection therewith, management of the
Company, which owns or exercises direction or control over an
aggregate of approximately 25% of the Shares (calculated on a
non-diluted basis), have entered into a Voting Agreement with Synatom
whereby they have agreed to vote their Shares in favour of the
Special Resolution. In addition, Synatom intends to vote its current
holdings of approximately 9.9% of the Company in favour of the
Special Resolution. Synatom will not be voting any of the Shares
acquired in this transaction at the Special Meeting.
Management of the Company have agreed to enter into a Shareholders
Agreement with the Company and Synatom regarding, among other things,
mutual rights of first refusal on the sales of Shares, subject to
certain exceptions, and certain anti-dilution rights in favour of
Synatom. Management of the Company have also agreed to remain in
their current positions for a period of five years and to not-compete
for a period of one year after they cease providing services to the
Company.
Further details of the private placement and the aforementioned
agreements will be contained in the management information circular
to be mailed to shareholders of the Company on or about June 20, 2008
in connection with the Special Meeting. Copies of the Private
Placement Agreement, the Voting Agreement, the Shareholders Agreement
and the Warrant will also be available on Sedar at www.sedar.com.
Mr. Robert Leclere, CEO of Synatom, stated that "Synatom values and
welcomes the experience of Powertech management in in-situ recovery
as currently developed in the United States, which it considers as a
very environment-friendly uranium production method. This investment
is consistent with Synatom's strategy to focus on the development of
promising near-term production projects."
Mr. Richard F. Clement, Jr., President and CEO of Powertech, stated,
"We are pleased to welcome Synatom as a substantial shareholder in
the company. We anticipate a mutually beneficial working relationship
and look forward to their input and knowledge of the world wide
uranium industry. The proceeds of this strategic investment by
Synatom will help Powertech achieve its goal of becoming a
significant in-situ recovery (ISR) uranium producer in the United
States."
About Societe Belge de Combustibles Nucleaires Synatom SA
Synatom is a subsidiary of Electrabel (www.electrabel.com), a leading
European energy company which has become the largest power company in
the Benelux market with a generating capacity of more than 30,000 MW.
Electrabel is 100% owned by Suez, an international industrial and
services group (www.suez.com). Synatom manages the fuel cycle for the
Belgian nuclear power plants, including:
- the fuel cycle front-end management, i.e., the supply with enriched
uranium of the seven nuclear power units with an annual production of
around 45 TWh; and
- the fuel cycle back-end management, i.e., the management of all
activities in connection with spent nuclear fuel.
In addition, Synatom manages the reserves for the costs related to
spent fuel and the future dismantling of nuclear power plants.
Synatom's 2007 turnover amounted to 355.162 million Euros. For more
information, please visit http://www.synatom.com.
About Powertech Uranium Corp.
Powertech Uranium Corp. is a mineral exploration and development
company that, through its Denver-based subsidiary Powertech (USA),
Inc., holds the Dewey-Burdock Uranium Deposit in South Dakota, the
Centennial Project in Colorado and the Dewey Terrace and Aladdin
Projects in Wyoming. The company's key personnel have over 200 years
of experience in the uranium industry throughout the United States,
and have permitted more than a dozen in-situ operations for
production. For more information, please visit
http://www.powertechuranium.com.
POWERTECH URANIUM CORP.
Richard F. Clement Jr., President & CEO
SOCIETE BELGE DE COMBUSTIBLES NUCLEAIRES SYNATOM SA
Robert Leclere, Chief Executive Officer
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements,
which reflect the expectations of management regarding the Company's
overall business development objectives and plans. Forward-looking
statements consist of statements that are not purely historical,
including any statements regarding beliefs, plans, expectations or
intentions regarding the future. Such statements are subject to risks
and uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements. No assurance can be given that any of the events
anticipated by the forward-looking statements will occur or, if they
do occur, what benefits the Company will obtain from them. These
forward-looking statements reflect management's current views and are
based on certain expectations, estimates and assumptions which may
prove to be incorrect. A number of risks and uncertainties could
cause our actual results to differ materially from those expressed or
implied by the forward-looking statements, including: (1) a downturn
in general economic conditions in North America and internationally,
(2) the inherent uncertainties and speculative nature associated with
uranium exploration, (3) a decreased demand for uranium, (4) any
number of events or causes which may delay or cease exploration and
development of the Company's property interests, such as
environmental liabilities, weather, mechanical failures, safety
concerns and labour problems; (5) the risk that the Company does not
execute its business plan, (6) inability to retain key employees, (7)
inability to finance operations and growth, (8) inability to obtain
all necessary environmental and regulatory approvals, (9) an increase
in the number of competitors with larger resources, and (10) other
factors beyond the Company's control. These forward-looking
statements are made as of the date of this news release and the
Company assumes no obligation to update these forward-looking
statements, or to update the reasons why actual results differed from
those projected in the forward-looking statements. Additional
information about these and other assumptions, risks and
uncertainties are set out in the "Risks and Uncertainties" section in
the Company's MD&A filed with Canadian security regulators.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of the content of this News Release.
Contacts:
Powertech Uranium Corp.
Thomas A. Doyle
CFO, VP Finance
(604) 685-9181
(604) 685-9182 (FAX)
Email: info@powertechuranium.com
Website: www.powertechuranium.com
Societe Belge de Combustibles Nucleaires Synatom SA
Robert Leclere
CEO
+32.2.505.0701
Email: robert.leclere@synatom.com
Website: www.synatom.com