Uranium Participation to sell shares to buy uranium

TORONTO, Feb 28 (Reuters) - Canada's Uranium Participation Corp (U.TO), a major holding fund, said on Thursday it would issue C$65 million worth of shares to fund the purchase of 900,000 pounds of uranium.

The fund, which has contributed to rising uranium prices by purchasing uranium to hold, said it would issue 6,375,000 common shares at C$10.20 each on the Toronto Stock Exchange.

The fund's stock was up 32 Canadian cents, or 3.1 percent, at C$10.74 at midday on Thursday.

The purchase would represent about 5 percent of the whole 2007 spot market activity in uranium, the key fuel for the nuclear power industry.

It was not immediately clear when Uranium Participation intended to make the purchase.

Nuclear energy provides about 16 percent of global electricity.

($1=$0.97 Canadian) (Reporting by Jonathan Spicer and Anna Stablum in London; Editing by Peter Galloway)