More money for Forsys at Valencia

After announcing a new uranium discovery on its Valencia uranium property in Namibia back in mid-December, Forsys Metals (FSY-T) has secured roughly $38 million in financing to put into its flagship property.

Valencia is located roughly 35 km from Rio Tinto‘s (RTP-N, RIO-L) majority owned Rossing Uranium mine. That mine has been producing yellowcake since 1976 and accounts for roughly 7.5% of the global supply.

A prefeasibility study being carried out at Valencia by Snowden Mining Consultants is expected to be completed in the first quarter of this year.

Past intersects at the property have returned grades of 21.48 metres grading 0.029% U3O8 and 21.84 metres grading 0.02% U3O8.

Salman Partners is the lead agent in a financing syndicate for the placement of eight million common shares at $4.75 per share with an over allotment option of an additional two million shares for gross proceeds up to $47.5-million.

In connection with the financing, the company will pay a fee of 4% of the gross proceeds of the financing.

In Toronto on Jan. 3 Forsys shares were off roughly 2% or 12 to $5.28 on nearly 2 million shares traded.

Since making the jump to the big board from the TSX Venture Exchange on Oct. 16 of 2006, Forsys shares have gained $3.50 on the back of strong uranium prices and news of more discoveries at Valencia.

On Dec. 14 the company announced the discovery of outcropping high grade uranium-bearing alaskite granite roughly 1,500 metres from the Valencia main zone.

Toronto-based Forsys plans to begin exploration work in mid-January of this year on the new discovery which will consist of geological mapping, additional sampling and drill road construction for a diamond drilling program slated to start in late-February, 2007.

The company also says funds from the financing will go towards advanced ordering of long-lead time items and equipment for continued work at Valencia.

In October of 2006 Forsys announced plans to divest itself of all of its non-uranium assets. The company still holds prospective gold, zinc, copper and diamond properties in Namibia.