Titan Uranium Inc.

Titan Uranium Inc.
Uranium Power Corp.

Uranium Power Corp.

May 08, 2009 17:52 ET

Titan Uranium Inc. to Acquire Uranium Power Corp.

(all figures are in Cdn Dollars unless otherwise stated)

SASKATOON, SASKATCHEWAN--(Marketwire - May 8, 2009) - Titan Uranium Inc. ("Titan") (TSX VENTURE:TUE) and Uranium Power Corp. ("UPC") (TSX VENTURE:UPC) today announced they have entered into a definitive agreement (the "Definitive Agreement") pursuant to which Titan will acquire by way of a plan of arrangement all of the outstanding securities of UPC (the "Transaction"). Upon completion of the Transaction, existing Titan and UPC shareholders will each own 50% of the issued and outstanding shares of Titan, which will then own 100% of UPC.

The Transaction is expected to result in a number of benefits arising from a combined asset portfolio, including the following:

- Added scale and market presence in the uranium sector

- Potential near-term production profile

- A diversified uranium exploration portfolio in the US and Canada and a roster of projects in various stages of development

- Combined management experience

- Greater financial strength

The purchase price payable by Titan for each UPC common share is anticipated to be 0.5378 common shares of Titan, subject to adjustment to ensure that upon completion of the transaction each shareholder group will own 50% of the issued and outstanding shares of Titan. Based on the closing prices of Titan's and UPC's common shares on the TSX Venture Exchange (the "TSX-V") on May 7, 2009, this offer represents a premium of 3.4% to the UPC shareholders on May 7, 2009 and 13.4% to the UPC shareholders, based on the 10-day volume weighted average trading price of both companies' shares on the TSX-V.

"This strategic acquisition creates a stronger company with diversified assets in various stages of exploration and development and a larger treasury," stated Brian Reilly, President of Titan. "Our objective is to enhance shareholder value and we believe the combined entity is greater than the sum of its parts to the benefit of both Titan and UPC shareholders. We plan to build on the synergies and opportunities presented by the transaction. Titan is well-positioned for future growth in a uranium sector with very solid market fundamentals."

Chris Healey, President of UPC added, "We at UPC are excited at this opportunity to expand our exposure in the uranium business with the highly prospective Athabasca and Thelon projects in Titan's portfolio. An additional attraction is that these projects are well funded by major industry players."

Overview of Titan and UPC and their Assets

Titan Uranium Inc.

Titan is driven by advancing exploration projects to discovery in the proven Athabasca and prospective Thelon basins located in Saskatchewan and Nunavut, respectively. Titan has gained market recognition for its ability to attract strategic partners to participate in exploration on its properties by virtue of its 1.6 million acre land position and its technical expertise. The option agreement participants of Titan include: Japan Oil, Gas and Metals National Corporation (JOGMEC), Vale Exploration Canada Inc. (VEC), and Mega Uranium Ltd. These optionees will contribute $4.7 million in exploration programs managed by Titan in 2009.

Uranium Power Corp.

UPC has focused on exploring and developing uranium properties in the western USA. Its major asset is a 50% interest in the Sheep Mountain uranium mine in the Crooks Gap Mining District of Fremont County, Wyoming, in a joint venture with Uranium One Inc. The Sheep Mountain mine has an NI 43-101 compliant Inferred Resource of 4,560,000 tons at an average grade of 0.17% eU3O8, (15.6 million pounds contained U3O8). The technical report on the Sheep Mountain uranium project was prepared for UPC by Scott Wilson Roscoe Postle Associates Inc. and authored by C. Stewart Wallis, P. Geo. dated October 10, 2006. Additional information including the estimation method and cut-off grade may be found in the report which was filed on SEDAR on October 12, 2006. UPC also has significant interests in uranium exploration projects in Utah, Wyoming, Arizona and Saskatchewan. The UPC management team brings extensive uranium exploration and production experience, including both conventional and in-situ recovery mining, to the company.

J. Allan McNutt, P. Geo., M.A.Sc., is Titan's Qualified Person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information contained in this release.

Transaction Details

The Transaction has been structured as a plan of arrangement under the Business Corporations Act (British Columbia) and was unanimously approved by the board of directors of both companies. Shareholders of Titan, representing 26% of Titan's issued and outstanding shares, and of UPC, representing 7% of UPC's issued and outstanding shares, have entered into voting support agreements pursuant to which they have agreed to support, and vote in favour of, the Transaction.

The Transaction is subject to satisfaction of a number of closing conditions, including the receipt of required regulatory approvals (including of the TSX-V), court approvals, and the approval of shareholders of UPC holding at least two-thirds of the common shares of UPC represented at a special meeting of shareholders of UPC to be called to consider the Transaction. The Definitive Agreement contains a reciprocal break fee in the amount of $100,000, which is payable in certain circumstances if the Transaction is not completed. The Definitive Agreement also provides that UPC will call and hold a special shareholder meeting no later than July 24, 2009, or such other date as may be agreed to by the parties, for the purposes of considering the Transaction. If all necessary approvals are obtained and the conditions contained in the Definitive Agreement are satisfied, Titan and UPC expect that the Transaction will close on or about July 31, 2009.

After closing of the Transaction, Titan is expected to have approximately 106 million common shares issued and outstanding, with current Titan shareholders owning 50% and current UPC shareholders owning 50%.


Upon completion of the Transaction, the executive management team of the combined entity will consist of: Brian Reilly (President and CEO), Chris Healey (COO) and Kelly McShane (CFO).

It is anticipated that the board of directors of the combined entity will include one nominee of each of Titan and UPC, and one director nominated by Mega Uranium Inc, which is a significant shareholder. The remaining two nominees shall qualify as independent directors of the combined entity under securities laws.

Financial Advisors

Titan's financial advisor is Deloitte & Touche LLP ("Deloitte"). UPC's financial advisor is Canaccord Adams ("Canaccord"). Canaccord has rendered an opinion, dated May 8, 2009, that as of the date of the opinion and subject to the qualifications and limitations set forth therein, the consideration offered pursuant to the Transaction is fair, from a financial point of view, to the UPC shareholders. Deloitte has rendered an opinion, dated May 8, 2009, that as of the date of the opinion and subject to the qualifications and limitations set forth therein, the consideration offered pursuant to the Transaction is fair, from a financial point of view, to the Titan shareholders.

The opinions of Canaccord and Deloitte have been accepted by each of the respective Boards in determining that the purchase price payable to UPC shareholders is fair and in the best interest of the shareholders of each of Titan and UPC.


Certain information contained in this news release, including any information relating to the proposed Transaction between Titan and UPC, the expected timetable for completing the Transaction, benefits and synergies of the Transaction, future opportunities for the combined company and any other states regarding Titan and UPC's future expectations, beliefs, goals or prospects constitute forward-looking information within the meaning of applicable securities legislation (collectively, "forward-looking statements"). All statements in this news release that are not statements of historical fact (including statements containing the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions) should be considered forward-looking statements. All such forward-looking statements are subject to important risk factors and uncertainties, many of which are beyond Titan and UPC's ability to control or predict. A number of important factors could cause actual results or events to differ materially from those indicated or implied by such forward-looking statements, including without limitation: the parties' ability to consummate the Transaction; the conditions to the completion of the Transaction, including the receipt of shareholder approval, court approval or the regulatory approvals required for the Transaction may not be obtained on the terms expected or on the anticipated schedule; the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the Transaction; the volatility of the international marketplace; and any other factors described in Titan's and UPC's most recent annual and quarterly financial reports.

The statements in this news release concerning anticipated dates for the holding of the UPC shareholders' meeting and the anticipated closing date for the Transaction are based on certain assumptions of Titan and UPC, including assumptions as to the time required to prepare meeting materials for mailing, the timing of receipt of the necessary regulatory and court approvals and the time necessary to satisfy the conditions set out in the Definitive Agreement. The statements in this news release relating to the benefits and synergies of the Transaction, future opportunities for the combined company and any other statements regarding Titan and UPC's future expectations, beliefs, goals or prospects are also based on assumptions, including assumptions as to: the time, effort and cost required to integrate the businesses; the ability to successfully operate the combined business with lesser expenses than those currently expended by the two companies together; the Transaction not disrupting business in any material respect; and there being no sustained material deterioration in the business and economic conditions in the marketplace that would impact the combined company.

Titan and UPC assume no obligation to update the information in this communication, except as otherwise required by law. Additional information identifying risks and uncertainties is contained in Titan's and UPC's respective filings with the various provincial securities commissions which are available online at www.sedar.com. Forward-looking statements are provided for the purpose of providing information about the current expectations, beliefs and plans of the management of each of Titan and UPC relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. Readers are also cautioned not to place undue reliance on these forward-looking statements, that speak only as of the date hereof.

This news release and the information contained herein does not constitute an offer of securities for sale in the United Sates and securities may not be offered or sold in the United States absent registration or exemption from registration.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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