2006 News Releases
Mega Uranium Ltd. Announces Closing of $31.5 Million Private Placement
Toronto, Ontario, Canada, April 21, 2006 – Mega Uranium Ltd. (“Mega”) (“MGA”: TSXV) is pleased to announce that it has closed its previously announced private placement of common shares and share purchase warrants (see press releases dated April 6 and April 11, 2006) raising gross proceeds of $31,531,600. Pursuant to the financing, Mega issued 3,709,600 units at a price of $8.50 per unit. Each unit consists of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of Mega at an exercise price of $12.00 per share until October 21, 2007 (the “Warrant Term”). If, following August 22, 2006, the closing price of Mega’s common shares exceeds $16.00 for 20 consecutive business days, then the Warrant Term shall be automatically reduced and the share purchase warrants will expire on the date that is 30 days following the issuance of a press release announcing the reduced Warrant Term. The securities issued in connection with the financing are subject to a hold period expiring August 22, 2006. This financing is subject to final approval by the TSX Venture Exchange.
“With the proceeds of this financing, the impending closing of our Hindmarsh Resources Limited acquisition, and our existing cash, Mega will have approximately $50 million available which will allow us to continue our aggressive acquisition and exploration strategy,” said Mr. Sheldon Inwentash, Chairman and Chief Executive Officer.
Although the financing was non-brokered, Mega paid a cash commission and issued an aggregate of 55,855 compensation warrants to certain dealers that arranged for the sale of units. Each compensation warrant entitles the holder to acquire one common share of Mega at a price of $8.50 until October 21, 2007 (the “Broker Warrant Term”). If, following August 22, 2006, the closing price of the common shares exceeds $16.00 for 20 consecutive business days, then the Broker Warrant Term shall be automatically reduced and the compensation options will expire on the date which is 30 days following the issuance of a news release announcing the reduced Broker Warrant Term.
In connection with the financing, an aggregate of 137,000 units were issued to related parties and their associated entities. The filing of a material change report relating to the financing will occur less than 21 days before the closing date of the financing, however, Mega believes that this is reasonable and necessary as the information contained in the material change report was not previously available to Mega.
Mega Uranium Ltd. is a Toronto-based mineral resources company with a focus on uranium properties in Australia, Argentina, Mongolia and Canada. Further information on Mega can be found on the company’s website at www.megauranium.com
This news release contains forward-looking statements within the meaning of the “safe harbour” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and other factors that may cause Mega’s results to differ materially from expectations. These include risks relating to market fluctuations, property performance and other risks. These forward-looking statements speak only as of the date hereof. Mega Uranium disclaims any intent or obligation to update these forward-looking statements and cautions investors from placing undue reliance on forward-looking statements. Mega does have an ongoing obligation to disclose material information as it becomes available.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Mega Uranium Ltd.
Sheldon Inwentash, CEO
Telephone: (416) 643-7630