Powertech Uranium Corp.

Powertech Uranium Corp.

October 15, 2009 09:00 ET

Powertech Enters Into $13.8 Million Loan Facility With Synatom

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 15, 2009) - POWERTECH URANIUM CORP. ("Powertech" or the "Company") (TSX:PWE)(FRANKFURT:P8A) and SOCIETE BELGE DE COMBUSTIBLES NUCLEAIRES SYNATOM SA ("Synatom") (Vancouver, B.C. and Brussels, Belgium) (October 15, 2009) are pleased to announce that they have entered into the loan facility (the "Loan Facility") disclosed in the Company's news release of August 4, 2009 and approved by a majority of the Company's disinterested shareholders at a special meeting held on September 24, 2009.

Pursuant to the terms of the Loan Facility, Synatom has agreed to make available to the Company the Loan Facility in the principal amount of Cdn.$13.8 million. Concurrent with the entering into of the Loan Facility, the Company drew down the first $3.45 million tranche of the Loan Facility and used the proceeds from the draw down to repay the Cdn.$3.45 million bridge loan (the "Bridge Loan") made by Synatom to the Company on August 4, 2009. If drawn down, the Company intends to use the proceeds of the remaining three tranches of the Loan Facility for working capital and to advance its mineral properties towards production.

The provision of the Loan Facility to Powertech is a strategic investment for Synatom and is for investment purposes only. Synatom may increase or decrease its investment in Powertech from time to time, depending on market conditions or any other relevant factors.

Terms of the Loan Facility:

The Loan Facility is comprised of four equal tranches of Cdn.$3,450,000 each. The principal amount of the second tranche (the "Convertible Tranche") is convertible into up to 6,900,000 common shares of the Company at a conversion price of Cdn.$0.50 per share, subject to customary anti-dilution adjustments.

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.

Repayment of the Loan Facility will be secured by existing security granted by the Company and its wholly-owned subsidiaries to Synatom and by further security granted in the Loan Facility.

Anti Dilution and Governance Rights:

The conversion price and the number of common shares issuable upon conversion of the Convertible Tranche 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.

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.

Effect of the Loan Facility on Synatom's Interest in the Company

As of October 15, 2009, Synatom holds 10,890,000 common shares of the Company (representing a 19.6% interest in the Company, calculated on a non-diluted basis based on 55,429,022 common shares of the Company outstanding on the date hereof), warrants to acquire 6,000,000 common shares, exercisable at Cdn.$2.00 per share, and a convertible debenture in the principal amount of Cdn.$9 million that is convertible into up to 22,050,774 common shares at a price of $0.50 per share. In the event that the full principal amount of the Convertible Tranche is converted, Synatom will acquire an additional 6,900,000 common shares. Assuming full exercise of the warrants and full conversion of the convertible debenture and the Convertible Tranche, Synatom will hold approximately 50.7% of the Company's common shares, calculated on a fully-diluted basis based on 90,379,796 common shares of the Company outstanding assuming full exercise of the warrants and full conversion of the convertible debenture and the Convertible Tranche.

About Societe Belge de Combustibles Nucleaires Synatom SA

Synatom is subsidiary of Electrabel (http: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 (http: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) the possibility that Synatom will exercise its warrants or convert the principal of the convertible debenture or the Convertible Tranche into common shares of the Company, (2) whether the Company will be able to repay amounts owing under the Loan Facility as they become due, (3) whether the Company will draw down any or all of the remaining three tranches of the Loan Facility, including the Convertible Trance, (4) whether Synatom will increase or decrease its investment in the Company, or (5) 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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