Powertech Uranium Corp.

Powertech Uranium Corp.
Societe Belge de Combustibles Nucleaires Synatom SA

August 04, 2009 14:54 ET

Synatom Agrees to Make Additional Strategic Investment in Powertech

VANCOUVER, BRITISH COLUMBIA and BRUSSELS, BELGIUM--(Marketwire - Aug. 4, 2009) - POWERTECH URANIUM CORP. (TSX:PWE)(FRANKFURT:P8A) ("Powertech" or the "Company") and SOCIETE BELGE DE COMBUSTIBLES NUCLEAIRES SYNATOM SA ("Synatom") are pleased to announce that they have entered into a Bridge Loan Agreement pursuant to which Synatom will provide the Company with a bridge loan in the amount of Cdn.$3,450,000 (the "Bridge Loan"). The Company and Synatom have also entered into a Loan Facility Placement Agreement (the "Loan Facility Placement Agreement") with Powertech (USA) Inc. pursuant to which, subject to the receipt of the approval of the Toronto Stock Exchange and the Company's shareholders, and the repayment of the Bridge Loan, the Company will enter into a loan facility with Synatom (the "Loan Facility") for the aggregate principal amount of Cdn.$13.8 million. The Company intends to use the net proceeds of the Bridge Loan and the Loan Facility for working capital and to advance its mineral properties towards production.

Terms of the Bridge Loan:

The Bridge Loan bears interest at the rate of 9% per annum, compounded annually, and has a maturity date of the earlier of: (i) November 4, 2009; (ii) the time of initial drawdown, if any, under the Loan Facility; and (iii) the date on which the Company terminates the Loan Facility Placement Agreement in accordance with the terms of the Loan Facility Placement Agreement.

Terms of the Loan Facility:

The Loan Facility will be divided into four equal tranches of Cdn.$3,450,000 each. The principal amount of the second tranche will be convertible into common shares of the Company at a conversion price of Cdn.$0.50 per common share.

The maturity date for the funds drawn down under each tranche will be 18 months from the actual drawdown date of such tranche. On each tranche maturity date, the Company will repay the applicable principal amount of the tranche amount borrowed, together with all accrued and unpaid interest thereon.

Each of the first tranche and the second tranche will bear interest at the rate of 7% per annum, and each of the third and fourth tranches will bear interest at the rate of 9% per annum, with interest for each tranche compounding and accruing from the date of drawdown and payable at the respective tranche maturity date.


The Bridge Loan and the Loan Facility will be secured by existing security granted by the Company and its wholly-owned subsidiaries to Synatom, by certain amendments to certain other mortgages and deeds of trust and through certain additional guarantees in favour of Synatom.

Anti Dilution and Governance Rights:

The conversion price and the number of common shares issuable upon conversion of the second tranche of the Loan Facility will be subject to customary anti-dilution adjustments in the event of a subdivision, consolidation or reclassification of the Company's common shares or the issuance of common shares to shareholders as a stock dividend.

In the event that the Loan Facility is approved by the Company's shareholders, the Company has also agreed not to take certain corporate actions without the consent of Synatom until the maturity of the Loan Facility. These negative covenants are in addition to, and not in substitution of, the negative covenants of the Company agreed to in connection with prior private placements with Synatom in June, 2008 and February, 2009.

Shareholder Approval and Other Related Transaction Agreements:

The Company will be seeking shareholder approval at a special meeting of the Company's shareholders to be held on or about September 24, 2009, for a special resolution approving the entering into of the Loan Facility by the Company.

Each of Wallace M. Mays, the Wallace M. Mays 2006 Family Trust No. 1, Richard F. Clement, Jr., the Clement Family Limited Partnership, Thomas A. Doyle and Greg Burnett, which collectively own or exercise direction or control over an aggregate of approximately 22.9% of the Company's outstanding common shares (calculated on a non-diluted basis), have entered into a Voting Agreement with Synatom, dated August 4, 2009, whereby they have each agreed to vote their common shares in favour of the special resolution. As required by the rules and policies of the TSX and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, Synatom will not be voting any of the common shares that it owns at the special meeting.

Further details with respect to the Loan Facility and the aforementioned agreements will be contained in the management information circular to be mailed to shareholders of the Company on or about August 31, 2009 in connection with the special meeting. Copies of the Bridge Loan Agreement, the Loan Facility Placement Agreement, the Voting Agreement, the Loan Facility and the related security documents will also be available on SEDAR at www.sedar.com.

About Societe Belge de Combustibles Nucleaires Synatom SA

Synatom is subsidiary of Electrabel (www.electrabel.com), a leading European energy company which has become the largest power company in the Benelux market with a generating capacity of more than 30,000 MW. Electrabel is 100% owned by GDF SUEZ an international industrial and services group (www.gdfsuez.com). Synatom manages the fuel cycle for the Belgian nuclear power plants, including:

- the fuel cycle front-end management, i.e., the supply with enriched uranium of the seven nuclear power units with an annual production of around 45 TWh; and

- the fuel cycle back-end management, i.e., the management of all activities in connection with spent nuclear fuel.

In addition, Synatom manages the reserves for the costs related to spent fuel and the future dismantling of nuclear power plants. Synatom's 2008 turnover amounted to 222.077 million Euros. For more information, please visit http://www.synatom.com.

About Powertech Uranium Corp.

Powertech Uranium Corp. is a mineral exploration and development company that, through its Denver-based subsidiary Powertech (USA), Inc., holds the Dewey-Burdock Uranium Deposit in South Dakota, the Centennial Project in Colorado and the Dewey Terrace and Aladdin Projects in Wyoming. The company's key personnel have over 200 years of experience in the uranium industry throughout the United States, and have permitted more than a dozen in-situ operations for production. For more information, please visit http://www.powertechuranium.com.


Richard F. Clement Jr., President& CEO


Robert Leclere, Chief Executive Officer

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's overall business development objectives and plans. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with uranium exploration, (3) a decreased demand for uranium, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems; (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, (8) inability to obtain all necessary environmental and regulatory approvals, (9) an increase in the number of competitors with larger resources, and (10) other factors beyond the Company's control. These forward-looking statements are made as of the date of this news release and the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in the Company's MD&A filed with Canadian security regulators.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.

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