Toronto, Ontario, October 2, 2006 – Mega Uranium Ltd. (“Mega”) (MGA:TSX) is pleased to announce that it has closed its previously announced flow-through financing (see press releases dated September 11 and September 12, 2006). Mega issued a total of 2,500,000 flow-through units at a price of $4.75 per flow-though unit (the “Flow-Through Units”) for gross proceeds of $11,875,000, which includes the exercise of the $2,375,000 overallotment option. Each Flow-Through Unit consists of one flow-through common share and one-half of one non flow-though common share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one additional common share of Mega (which is a non-flow through share) at any time until April 2, 2008 (the “Warrant Term”) at an exercise price of $6.00 per common share. If, following February 3, 2007, the daily volume weighted average trading price of the common shares on the Toronto Stock Exchange (“TSX”) exceeds $8.00 on each of those 20 consecutive days, then Mega may, within 30 days of such occurrence give written notice to the holders of the Warrants that the Warrants will expire at 4:00 p.m. (Toronto time) on the 30th day following the giving of notice unless exercised prior to such date.
Canaccord Adams acted as lead agent and led a syndicate of agents including Westwind Partners Inc. and Max Capital Markets Ltd. (collectively, the “Agents”). In connection with the financing, the Agents received a cash commission of 6% of the gross proceeds of the financing and compensation options entitling the holders to purchase up to 150,000 common shares at a price of $4.55 per common share until October 2, 2008. Terms of the Agency Agreement between the Agents and Mega can be found on SEDAR at www.sedar.com
All of the foregoing securities issued in connection with the financing will be subject to a hold period of four months and one day from the date of issuance. The financing remains subject to final approval of the TSX.
In connection with the financing, an aggregate of 110,000 Flow-Though Units were issued to related parties. 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, Bolivia and Canada. Further information on Mega can be found on the company’s website at www.megauranium.com
. Mega Uranium’s Australian uranium properties, including without limitation the Ben Lomond and Maureen properties, are subject to state policies which presently prohibit the mining of uranium in Australia.
THE TORONTO STOCK 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