Energy Metals to raise $5m in rights issue

West Perth-based uranium explorer Energy Metals Ltd aims to raise around $5 million through a non-renounceable rights issue to fund exploration of its tenements in the Northern Territory and Western Australia.

The full text of an Energy Metals announcement is pasted below

Energy Metals Limited is pleased to announce a non-renounceable rights issue ("Rights Issue") to eligible shareholders of approximately 1,415,866 fully paid ordinary shares on the basis of one (1) new fully paid ordinary share ("Share") for every twenty (20) Shares held at an issue price of $3.50 per Share to raise approximately $4,955,531 (based on Energy Metals' undiluted share capital). The offer will be available to all registered shareholders who hold Shares on 28 November 2007 ("Record Date"). Fractional entitlements will be rounded down and Shares issued pursuant to the Rights Issue will rank equally with all Shares on issue. Shareholder approval is not required in relation to the Rights Issue. Pursuant to new provisions introduced into the Corporations Act 2001, the Company is not required to prepare a prospectus for the Rights Issue.

The Rights Issue is fully underwritten by Hartleys Limited ("Underwriter"). In consideration for the underwriting, the Company has agreed to pay the underwriter a fee equal to 5% of the amount raised under the Rights Issue.

The Underwriter has entered into sub underwriting agreements with 12 of the Company's Top 20 shareholders (including some Director and/or Director related entities) representing 77.32% of the Company's issued capital, whereby they have agreed to take up their respective entitlements (in full) pursuant to the Rights Issue. These shareholders will be paid a fee of 1% of the value of their Shares taken up, which will be paid by the Underwriter out of the underwriting fees.

Option holders will be notified on 12 November 2007 of the Rights Issue and the need to exercise their options if they wish to participate in the Rights Issue.

In accordance with the Listing Rules of the Australian Securities Exchange, the Company has considered the number of shareholders with registered addresses outside of Australia and New Zealand and the size of the shareholdings held by those shareholders. Taking this into consideration as well as the costs of complying with the legal requirements and the requirements of the regulatory authorities relating to shareholders with registered addresses outside of Australia and New Zealand, the Company has formed the view that it is unreasonable to extend the Rights Issue to those shareholders.

The purpose of the Rights Issue is to raise approximately $4,955,531 (before expenses of the Rights Issue). The funds raised from the Rights Issue will be used to fund planned further exploration and development of the Company's 53.3% interest in the Bigrlyi Uranium Project (Northern Territory), advance the Company's 100% owned projects in both the Northern Territory and Western Australia and to provide additional working capital.

A proposed timetable for the Rights Issue is set out below in more detail:

• Rights Issue announcement, Appendix 3B and first Section 708AA Notice 12 November 2007
• Letter to option holders detailing the Rights Issue 12 November 2007
• Notice to security holders of Rights Issue terms 12 November 2007
• Ex date 22 November 2007
• Record date 28 November 2007
• Lodge second Section 708AA Notice and dispatch Entitlement and Acceptance Forms 29 November 2007
• Acceptances close at 5.00pm WDT (closing date) 13 December 2007
• Allotment of Shares, despatch of holding statements and lodge Section 708A Cleansing Notice 21 December 2007

This timetable is indicative only and may be subject to change, subject to the ASX Listing Rules.

NOTICE UNDER SECTION 708AA OF THE CORPORATIONS ACT 2001 (CTH)

The Company confirms the Rights Issue is being made without a disclosure document, pursuant to the exemption granted in section 708AA of the Corporations Act 2001 ("the Act").

Pursuant to section 708AA(7) of the Act, the Company provides the following information:

1. The Company will offer the Shares for issue without disclosure to investors under Part 6D.2 of the Act;
2. The Company is providing this notice under paragraph 2(f) of section 708AA of the Act;
3. As at the date of this notice, the Company has complied with:
   1. The provisions of Chapter 2M of the Act as they apply to the Company; and
   2. Section 674 of the Act; and
4. As at the date of this notice there is no information:
   1. That has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and
   2. That investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:
      • The assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or
      • The rights and liabilities attaching to the Shares; and
5. If all shareholders take up their entitlement under the Rights Issue, the Rights Issue will have no effect on the control of the Company. Assuming no shareholders take up their entitlements under the Rights Issue, the underwriter, Hartleys Limited, would acquire up to 1,415,866 Shares representing approximately 4.76% of the Company's voting shares on an undiluted basis.

FURTHER INFORMATION

As stated above, under the Rights Issue, approximately 1,415,866 Shares (subject to rounding) will be issued (this number may have to be increased to 1,958,493 Shares if all existing optionholders exercise their options prior to the Record Date). The Rights Issue Shares will be issued for $3.50 each.

Upon completion of the Rights Issue, and assuming existing optionholders do not exercise their options, the issued capital of the Company will comprise approximately 29,733,187 Shares, 8,507,542 listed options exercisable at $0.30 each on or before 30 June 2008; 400,000 options exercisable at $0.30 each on or before 30 June 2008; 1,250,000 unlisted options exercisable at $0.35 each on or before 30 June 2010; 165,000 unlisted options exercisable at $1.00 each on or before 30 June 2011;

200,000 unlisted options exercisable at $2.00 each on or before 30 June 2011 and 330,000 unlisted options exercisable at $3.00 each on or before 30 June 2011.

An Appendix 3B applying for quotation of the abovementioned Shares is appended.