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Uranium One and Energy Metals to Merge

Uranium One Inc. (“Uranium One”) and Energy Metals Corporation (“EMC”) are pleased to announce that the two companies have signed a definitive agreement whereby Uranium One will acquire all of the shares of EMC. The acquisition will dramatically enhance Uranium One’s asset portfolio in the United States and solidify the new Uranium One’s ability to build a leading U.S. uranium producer.

Under the terms of the agreement, EMC shareholders will receive 1.15 common shares of Uranium One for each issued share of EMC, representing a value of C$19.12 per share based upon the closing price of Uranium One on the TSX on June 1, 2007. This represents a 28% premium to the 20 day volume weighted average trading prices of Uranium One’s and EMC’s shares on the TSX for the period ending May 17, 2007, the day before EMC announced that it had entered into exclusive negotiations with respect to a potential sale of the company.

The acquisition of EMC is consistent with Uranium One’s value-accretive external growth strategy and will consolidate Uranium One’s position in the United States. On a pro forma basis, Uranium One will have:

  • A fully diluted market capitalization of US$7.8 billion and improved liquidity
  • A strong balance sheet with a combined cash balance of US$678 million (includes proceeds from in the money warrants and options)
  • A balanced and geographically diversified portfolio of reserves and resources
  • The second largest uranium reserve and resource base in the world in terms of publicly traded, pure play uranium companies
  • Two producing mines and a pipeline of nine projects with the potential to deliver year-on-year growth in production out to 2013
  • A low cost production base with 70% of production from in situ recovery (ISR)
  • A combined uranium sales contract book that is unhedged and provides investors with significant exposure to any further uranium price increases
  • The most comprehensive ISR and conventional mining team with the capacity to deliver on the combined company’s production growth profile

Commenting on the proposed acquisition, Neal Froneman, Uranium One President and CEO said:

“With our solid position in Kazakhstan and South Africa, the acquisition of EMC fits in perfectly with our stated strategy of value-accretive external growth and our focus on growth in the United States. The combination of Uranium One and EMC will create a powerhouse in the United States uranium sector with the potential to become the domestic supplier of choice for U.S. utilities. Our combined portfolio of assets will be geographically diversified, with assets in the world’s top five uranium jurisdictions. The existing conventional mining and ISR expertise within Uranium One, coupled with the excellent technical team that EMC has built over the past several years will result in one of the industry’s leading technical teams, with the necessary expertise to deliver on development and growth opportunities in the United States.”

Paul Matysek, President and CEO of EMC added:

“The transaction provides our shareholders immediate exposure to uranium production and cash flow, while at the same time creating new avenues for growth. The addition of Uranium One’s technical team will augment our elite ISR staff and provide us with the ability to develop our U.S. conventional uranium assets, which are incremental to our current growth strategy. The new Uranium One’s significant resource base, strong balance sheet and proven management team will ensure that the company becomes one of the world’s leading diversified uranium producers. My colleagues and I at EMC look forward to continuing to play an important role in what I believe to be the fastest growing and most dynamic uranium company in the world.”

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