TORONTO Oct 19 Mega Uranium (MGA.TO) said on
Monday it plans to raise C$50 million ($48.5 million) in a
public offering to help pay for feasibility studies on its Lake
Maitland project in Western Australia.
The bid to raise cash comes as global capital markets open
after an extended shutdown during the economic crisis and amid
a brighter outlook for prices of the mineral.
The Toronto-based mining development company said it would
sell 58,824,000 units at 85 Canadian cents each, with each unit
consisting of one share and half a purchase warrant.
A full purchase warrant will entitle the holder to buy one
common share at C$1.25 for a period of five years after the
closing of the offering.
Stock of Mega was flat at 85 Canadian cents on Monday
afternoon on the Toronto Stock Exchange.
The offering through a short-form prospectus in Canada and
private placement to investors in the United States and other
jurisdictions is expected to close on or about Oct. 26.
Prices for mined uranium, used to fuel nuclear power
plants, are seen rising again thanks in part to strong demand
Companies such as BHP Billiton (BHP.AX) (BLT.L), the owner
of the Olympic Dam project in South Australia, which contains
about one-third of the world's known uranium, are already
formulating expansion plans.
Analysts doubt, however, that uranium prices will return
soon to the record levels of two years ago, when speculative
buying, more than supply and demand, was the dominant market
Mega's offering is being underwritten by a syndicate of
underwriters led by RBC Capital Markets and UBS Securities
Canada Inc, and including Macquarie Capital Markets Canada Ltd,
Thomas Weisel Partners Canada Inc, Haywood Securities Inc,
Salman Partners Inc and Dundee Securities Corp.
Mega acquired the Lake Maitland uranium resource through
the takeover of Australia's Redport Ltd in December 2006.
(Reporting by Pav Jordan; editing by Rob Wilson)