Delta Uranium Inc.

Delta Uranium Inc.

September 16, 2009 15:39 ET

Delta Uranium Announces Proposed Financing with the MineralFields Group and Others

TORONTO, ONTARIO--(Marketwire - Sept. 16, 2009) -


Delta Uranium Inc. (TSX:DUR) ("Delta" or the "Corporation") announces that the Corporation intends on completing a private placement (the "Private Placement") of up to 12,500,000 flow-through units ("FT Units") at a purchase price of C$0.08 per FT Unit for aggregate gross proceeds of up to C$1,000,000. Each FT Unit shall consist of one flow-through common share and one flow-through common share purchase warrant (a "Warrant"). Each Warrant shall be exercisable into one common share of the Corporation for a period of two years from closing of the financing, at a price of C$0.15 per share in year one and at C$0.20 in year two.

Of the maximum amount to be raised, it is anticipated that the MineralFields Group will subscribe for up to C$750,000 through the sale of up to 9,375,000 FT Units.

The Corporation will pay a cash finder's fee equal to 5% of the FT Units subscribed for by MineralFields Group as well as a finder's fee option (the "Finder's Option") in the form of finder's units ("Finder Units") equal to 10% of the number of FT Units subscribed for by MineralFields Group. Each option shall be exercisable at a price of C$0.08 into one Finder Unit for a period of two years from the date of closing. Each Finder Unit will consist of one non-flow-through common share and one non-flow-through share purchase warrant. The warrants will have the same exercise price and terms as the Warrants issued under the private placement.

The Warrants, the Finder's Option and warrants issuable upon exercise of the Finder's Option will have customary provisions for anti-dilution adjustments in the event of a subdivision, consolidation or reclassification of the Corporation's common shares or issuances of securities or distributions to shareholders, and adjustments in connection with certain other specified corporate events.

Completion of the Private Placement is subject to a number of conditions including obtaining any required regulatory approvals including approval of the Toronto Stock Exchange ("TSX"). The issuance of the 12,500,000 Flow-Through Units, together with the Finder's Units, would result in the subscribers being issued securities equal to approximately 87.47% (27.5 million shares issuable) of Delta's currently issued and outstanding common shares. The issuance of the above noted securities will not result in a change in control of the Corporation.

Under the TSX Company Manual, shareholder approval would be required as a result of the number of common shares issuable in the Financing and the common shares issuable upon exercise of the Warrants, the Finder's Option and the Finder Warrants, in aggregate being in excess of 25% of the currently issued and outstanding common shares of Delta. Delta has applied to the TSX under the provisions of Section 604(e) of the Company Manual for a financial hardship exemption from securityholder approval requirements on the basis that the Company is in financial difficulty and does not have sufficient time to obtain shareholder approval. In this regard, Delta's board of directors have established an independent committee, comprised of directors who are free from any interest in the transactions, are unrelated to the MineralFields, the Finder or other subscribers, to consider factors surrounding the application. The board, upon recommendation of the independent committee, have concluded that Delta is in serious financial difficulty, the Private Placement is designed to improve Delta's financial situation and this transaction is reasonable for Delta in the circumstances, and have authorized such application. As a consequence of relying upon the financial hardship exemption under Section 604(e) of the TSX Company Manual, the TSX has informed the Company that it will, in the ordinary course, commence a de-listing review. The Company believes that, upon completion of the Private Placement, it will be in compliance with all of the TSX continued listing requirements.

Assuming Delta is able to satisfy various conditions and successfully negotiate definitive documentation and that the TSX grants the financial hardship exemption discussed above, Delta and MineralFields would be in a position to finalize the Financing on or about September 22, 2009.

"We are very pleased to be entering into this relationship with the MineralFields Group", said Wayne Isaacs, President and CEO. "This is an important milestone in the growth of Delta Uranium Inc. and we look forward to working with MineralFields Group as we develop our holdings in Canada. This is especially important as this financing allows us to commence a structured and aggressive exploration program on our C3, C4, C5 and C6 properties in the Athabasca Basin. Management believes that these projects will be instrumental in building shareholder value as we have seen with many explorers in the basin."

The proceeds of this financing will be used to incur Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)) at Delta's properties in Ontario, Saskatchewan and Newfoundland.

Cautionary Note to Investors

The completion of the Private Placement is subject to a number of conditions, many of which are beyond Delta's control. In addition, if the TSX does not grant Delta a financial hardship exemption from the shareholder approval requirements of the TSX Company Manual, the completion of the Private Placement would be substantially delayed and there can be no assurance that the Banks would be willing to enter into such a facility at such time and there can be no assurance that Delta will be able to successfully complete the Private Placement on the terms outlined above, or at all.

About MineralFields

MineralFields Group (a division of Pathway Asset Management) based in Toronto and Vancouver, is a mining fund with significant assets under administration that offers its tax-advantaged super flow-through limited partnerships to investors throughout Canada as well as hard-dollar resource limited partnerships to investors throughout the world. Pathway Asset Management also specializes in the manufacturing and distribution of structured products and mutual funds. Information about MineralFields Group is available at First Canadian Securities® is active in leading resource financings (both flow-through and hard dollar PIPE financings) on competitive, effective and service-friendly terms, and offers investment banking, mergers and acquisitions, and mining industry consulting services to resource companies. MineralFields and Pathway have financed several hundred mining and oil and gas exploration companies to date through First Canadian Securities®.

About Delta Uranium Inc.

Delta Uranium is TSX listed Canadian exploration company actively engaged in the acquisition, evaluation and exploration of uranium mineral properties in northeastern and northwestern Ontario, Athabasca Basin and Western Newfoundland, Canada.

Forward-Looking Information

This press release includes "Forward-Looking Information" within the meaning of the applicable securities legislation. Forward-looking information can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continues," or the negative of such terms, or other comparable terminology. All statements regarding the proposed terms, timing, use of proceeds and completion of the Private Placement, Delta's future compliance with TSX continued listing requirements and the timing of working programs and Delta's contractual payment obligations are forward-looking information that involves various risks and uncertainties. There is no assurance that the Private Placement will be completed, that contractual payments will be made or that work programs at Delta's properties will occur on the schedule set forth in this press release or at all. There can be no assurance that such information will prove to be accurate and actual results and future events could differ materially from those anticipated in such information. Important factors that could cause actual results to differ materially from these forward-looking information include: global economic factors, which may affect the availability and cost of financing; results of due diligence reviews by financing parties; unforeseen obstacles in the exploration work; increases in anticipated cash costs, operating costs, mining costs, capital expenditures and other costs; delays in obtaining equipment or personnel; decreases in anticipated mineral resources and metal prices, the inability of Delta to meet certain conditions required by MineralFields Group under the Private Placement and other factors disclosed under the heading "Risk Factors" and elsewhere in Delta documents filed from time to time with the Toronto Stock Exchange, the Ontario Securities Commission and other regulatory authorities. All forward-looking information included in this press release is based on information available to Delta on the date hereof. Delta assumes no obligation to update any forward-looking information unless required by law.

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