Energy Metals Announces Closing Of Us$7 Million Loan Agreement With Standard Uranium Inc.
Vancouver, British Columbia: January 12, 2006 Energy Metals Corporation (TSXV: EMC) ("EMC") is pleased to announce that it has closed the US$7 million Loan Agreement (the "Loan") with Standard Uranium Inc. (TSX-V: URN) ("URN") announced November 10th 2005 .
The Loan, evidenced by way of a secured convertible debenture of up to US$7,000,000 issued by URN to EMC, bears an interest rate of 4% per annum and is secured against certain assets acquired by URN from Everest Resources Company with US$5,205,000 of the Loan proceeds. The remaining proceeds available under the convertible debenture will be advanced upon URN providing notice to EMC. Certain portions of the principal amount of the Loan (the "Conversion Portion") shall be convertible, from time to time, into common shares of URN at the rate of CDN$1.45 per common share of URN (the "Conversion Shares") upon 60 days written notice to URN from EMC (the "Exercise Notice"). The Conversion Portion cannot exceed the dollar value equal to CDN$1.45 multiplied by 19.5% of the common shares of URN issued and outstanding on the date of the Exercise Notice. However, upon receipt of the Exercise Notice, URN shall have the option, within the 60 day notice period, of (i) prepaying the Conversion Portion and all outstanding interest; or (ii) issuing the Conversion Shares. Any shares issued on the conversion of the debenture will be subject to a four month hold period commencing January 5, 2006.
The amount advanced has been applied by Standard's indirect subsidiary to the acquisition of the Hobson processing plant, the associated satellite mining facilities and a Texas database, as well as certain leases covering the Palangana mining property, located in Karnes County and Duval County respectively, as announced in Standard's January 10, 2006 press release.
The TSX Venture Exchange has conditionally approved the Loan, subject to URN filing final documentation.
EMC and URN are advancing the business combination that was previously announced on November 10, 2005. The parties have completed their initial due diligence procedures in accordance with the terms of the November letter of intent and are currently preparing the various required documents to obtain all the necessary approvals, including shareholder approval.
Energy Metals Corporation is a Canadian listed company involved in developing resources to power the 21st century. The Company has adopted a corporate strategy to focus on the acquisition and development of uranium assets in politically favorable and mining-friendly jurisdictions within the United States to take advantage of the continuing growth in the U.S. and worldwide of demand for electrical energy. This increasing consumption is occurring at a time when uranium mine supplies are dwindling and inventories are being depleted.
The Company is targeting advanced uranium prospective properties in Wyoming, Texas and New Mexico that are amenable to ISL (in-situ leaching). This form of uranium mining was pioneered in Texas and Wyoming. It utilizes water wells and oxygen-fortified groundwater to mine the uranium in place. Energy Metals Corporation is also actively advancing other conventional mining and ISL opportunities for uranium properties in the States of Utah, Nevada, Oregon and Arizona.
For further information, please contact:
Energy Metals Corporation
Paul Matysek, CEO and President
604-684-9007
Bill Sheriff, Corporate Development, Director
1-972-333-2214
Ran Davidson, Corporate Communication
604-697-5688
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
