Wednesday, February 01, 2006

Feb 1 Uranium Stocks Update: Urasia Energy (CVE:UUU )

February 1, 2006 Urasia Plans Financing

UrAsia Energy Ltd ("UrAsia") (TSX-V: UUU) is pleased to announce that it has entered into an agreement with a syndicate led by Canaccord Adams Ltd. ("Canaccord") and including BMO Nesbitt Burns Inc., and GMP Securities Limited, pursuant to which Canaccord has agreed to purchase for resale to the public, on a bought deal basis, an aggregate of 39,225,000 common shares (the "Common Shares") of UrAsia at a price of $2.55 per CommonShare (the "Issue Price"), resulting in gross proceeds of approximately$100 million.

Closing is anticipated to occur on or about February 21, 2006. UrAsia intends to use the proceeds of the offering to accelerate the development of the South Inkai project in Kazakhstan, for potential acquisition opportunities, and for general working capital purposes. UrAsia is listed on the TSX Venture Exchange, trading under the symbol UUU.


No wonder Urasia hasn't been able to break that $3 mark. There are currently about 460 million outstanding shares of Urasia and it ended off trading at $2.84Cdn. With an additional 40 million shares @ $2.55Cdn, I expect dilution to take Urasia down to the $2.60-$2.65 level in the next three weeks. I'm not happy about this from a private investor point of view, but I am not about to panic and sell off. In fact, what I should think about doing is to accumulate more at that depressed level. Most likely I'll take a wait and see level.


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