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Uranium One Inc. Announces Financing and Formation of Strategic Relationship with Japanese Consortium - Final.

Article Excerpt
OPERATOR: Good morning, ladies and gentlemen. Welcome to the Uranium One strategic relationship transaction conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, with instructions provided at that time. (Operator Instructions).

I would like to remind everyone that this conference is being recorded today, Tuesday, February 10, 2009, at 10AM Eastern Time.

I would now like to turn the conference over to Jean Nortier, Chief Executive Officer. Please go ahead, sir.

JEAN NORTIER, PRESIDENT AND CEO, URANIUM ONE INC.: Thank you, Luke, and good morning, everyone. I'd like to welcome you all to the Uranium One conference call to discuss this transaction, which was announced this morning. I will be brief in my formal comments before opening up the call to any questions.

This discussion will contain certain forward-looking information, including any information as to the timing and completion of the proposed transaction, the potential benefits thereof, as well as future activities and developments of the consortium and Uranium One. Actual future results might differ from expected results for a variety of reasons, which are described in the Cautionary Statements Regarding Forward-Looking Information in our press release.

The partnership between Uranium One and TEPCO, Toshiba and JBIC -- or collectively, the consortium -- is expected to result in the creation of a new, powerful team in the nuclear industry. We expect to benefit from the consortium's strong relationships in Kazakhstan, their extent of knowledge, market intelligence and expertise in the nuclear fuel industry, as well as their significant financial resources.

Uranium One has entered into a subscription agreement whereby we have agreed to issue via private placement 117 million common shares or a pro forma 19.95% equity stake to a new corporation formed by the members of the Japanese consortium. Both TEPCO and Toshiba will have a 40% interest in the new corporation and JBIC will have a 20% stake. The equity issue price of CAD2.30 per common share represents a 15% premium to the 20-day volume-weighted average share price of Uranium One on the Toronto Stock Exchange.

Upon closing, the equity issue will result in gross proceeds to Uranium One of approximately CAD270 million. When combined with our existing cash resources, which were approximately $185 million on a consolidated basis at the end of January, the injection of capital will result in a very strong balance sheet for the Company.

The proceeds from the private placement are expected to be used for general corporate purposes, to accelerate our growth and development plans on our existing assets, particularly in the United States, and will allow us to take advantage of any value-enhancing acquisitions or partnership opportunities that may arise.

The consortium members are well known to KazAtomProm, and Uranium One has already partnered with a consortium at the Kharasan uranium project in Kazakhstan. TEPCO and Toshiba have direct ownership stakes in the project, and JBIC has provided a debt facility of CAD70 million to the Kyzylkum joint venture to help fund capital expenditures.

TEPCO is one of the world's most respected utility customers and is the largest electricity utility in Japan, providing power to the Tokyo metropolitan area. TEPCO has an electricity-generating capacity of over 62 gigawatts, approximately 28% of which is from nuclear power.

Toshiba is a large-cap diversified manufacturer of electronics and is involved in a broad range of power systems businesses around the world. Toshiba has a 67% interest in Westinghouse Electric, whose technology provides the basis for approximately all of the world's operating nuclear power plants.

Some of you may recall that in 2007, KazAtomProm, the Kazakh state-owned company responsible for mining and exporting uranium in Kazakhstan, also became involved in Westinghouse with the purchase of a 10% stake as part of...

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