Adelaide, Feb 3, 2007 (ABN Newswire) - A new A$14 million capital raising and float of uranium exploration assets will be launched next month after shareholders in Southern Gold Limited (ASX: SAU) voted to spin-off the Company's uranium interests into a new ASX-listed entity.

The assets cover all of Southern Gold's 20 uranium tenements in South Australia and will be injected into a new exploration vehicle, Southern Uranium Limited.

If fully subscribed, the proposed capital raising for Southern Uranium, currently a wholly-owned Southern Gold subsidiary, will be one of the largest Initial Public Offers for the commodity in the past 12 months.

It will join the ranks of like sized successful uranium listings such as Toro Energy Limited ($18 million).

Speaking after today's extraordinary general meeting in Adelaide, Southern Gold Chairman Mr Ric Horn, said that while a prospectus for the new entity was still being finalised, it was anticipated that Southern Gold shareholders would be given a priority entitlement to subscribe for shares in the new uranium float.

"The proposed current Offer structure is to issue up to 70 million, 20 cent ordinary shares to raise up to A$14 million," Mr Horn said.

"Our current option holders will also be able to participate, provided they exercise their Southern Gold options by February 12," he said.

"The intention is to open the IPO towards the end of February and to have Southern Uranium listed on the ASX by the end of March.

"Southern Gold will retain a 39% direct interest in the new company so the vote today heralds the commencement of what we believe is an exciting new chapter in the development of uranium exploration in Australia.

"The listing of Southern Uranium will potentially create a strong platform for future growth in the uranium industry and provide improved benefits for shareholders of both entities at a time of exceptionally strong market sentiment towards this increasingly in-demand, long-term commodity."

"Southern Uranium will be an aggressive explorer and will be able to commence work immediately," Mr Horn said.

"Our portfolio of palaeochannel and IOCGU uranium exploration projects across the Gawler Craton in South Australia is well established, with drill ready targets.
"Early drilling schedules will focus largely in the first year's work program.

"We plan to keep some IPO proceeds in reserve however for potential acquisitions."

Southern Uranium will be chaired by Mr Roger Marshall with Mr John Anderson as Managing Director.