Uranium One Inc SXRZF

thur nov 10 2005

[vern117]

UrAsia Energy's IPO worth $504M: Involved in three uranium projects in former U.S.S.R. National Post Thursday, November 10, 2005 Page: FP2 Section: Financial Post Byline: Barry Critchley Column: Off The Record Source: Financial Post Today is Day 3 in the trading history of UrAsia Energy Ltd., a Canadian-based uranium mining and development company that has interests in Kazakhstan. The company, which this week completed a $504-million initial public offering, is involved with three projects in the country that used to be part of the U.S.S.R. Proceeds from the offering will be used to fund UrAsia's entry to those projects. Aside from where it operates, the issuer is unusual in another area: It is public in Canada (its shares trade on the TSX Venture Exchange) and this month hopes to be public in London, where its shares will presumably trade on the Alternative Investment Market. UrAsia's equity offering -- the largest-ever equity financing by a TSX Venture Exchange company and one of the largest IPOs by a Canadian company this year -- was led by Canaccord International. BMO Nesbitt Burns and GMP Securities were also in the syndicate that oversaw the sale of 280 million subscription receipts at $1.80 a unit. The shares (UUU/TSX) closed yesterday at $1.58. Over the past two days, more about 16 million shares have been traded. The issue, which was sold mostly outside of Canada, was the largest in Canaccord's history. Canaccord was granted 40% of the deal; the other two were each given 30%. With a 5% commission, the three agents scooped up more than $25-million. The issue was done only after a major struggle. It was launched when there was more appetite from investors. (Initially, the talk was that the shares would be sold at $2.25 apiece.) Later, much of that potential demand evaporated and the issue ended up being priced closer to what would be regarded as book value. One of UrAsia's three projects has been operational for the past two years; the other two are in what has been called an advanced stage of development. UrAsia's partner on all three projects is Kazatomprom, an agency of the Kazakhstan government. UrAsia bought the three stakes from third parties, which are all unrelated to the government. The company expects to boost its annual production over the next decade to 10 million pounds -- or seven times more than what will be produced next year. UrAsia, which started life as Signature Resources, owes its genesis largely to Frank Giustra and Bob Cross, a couple of well-known mining financiers. In an earlier career, Cross and Giustra were chief executives at Yorkton Securities. Giustra became involved during the past year. One of his key moves was to retain Phillip Shirvington, UrAsia's president and chief executive. The former consultant was named CEO in May. Indeed, the issuer is the latest mining venture to be spun out of the Endeavour Financial group of companies. It emerged following a business combination with UrAsia BVI, a private company set up by, among others, Giustra. The two former Yorkton executives are also directors, as is Ian Telfer, the CEO of Goldcorp. (Telfer is UrAsia's non-executive chairman.) Cross owns 500,000 shares; Giustra owns 6.25 million, while Telfer -- who from all reports was active in the European portion of the road show -- is in for 2.2 million. "He was very helpful in the financing and providing guidance and with the negotiations," said one UrAsia insider. As a whole, directors, employees and consultants have been granted 7.25 million options at a price of $1.80 per share. Those options run for 10 years. - - - It was an inevitable result: Bring a non-investment grade rated issuer to market, earmark a portion for the retail investor, indicate that the deal will be priced attractively and watch the orders flow in. That's what happened to the seven-year issue by Shaw Communications Inc. What started out as a minimum offering of $300-million ended up at $450-million. The deal was priced yesterday. Of the $450-million sold, $100-million made its way into the hands of retail investors. Originally, when the issue was filed, Shaw spoke about allocating $50-million to the individual investor. The deal, which was led by TD Securities, came with a coupon of 6.1%. Given that it was priced at $99.389, investors ended up with a security that has a yield to maturity of 6.209%, or 215 basis points above Canada bonds. The issue was rated BB (high) by DBRS; BB+ by Standard & Poors and Ba2 by Moody's Investor Services. Idnumber: 200511100093 Edition: National Story Type: Business; Column Note: [e-mail] Length: 720 words