ENERGY METALS LTD — Capital/Financing Update 2007

Nov 11, 2007

12 November 2007

The Manager Company Announcements Office Australian Securities Exchange Level 4, 20 Bridge Street SYDNEY NSW 2000

Energy Metals Limited ABN 63 111 306 533 Level 2 18 Kings Park Road West Perth WA 6005 PO Box 1033 West Perth WA 6872 Western Australia Telephone: (08) 9322 6904 Facsimile: (08) 9321 7950 Email: enquiry@energymetals.net Web: www.energymetals.net

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via electronic lodgement

Dear Sir

NON-RENOUNCEABLE RIGHTS ISSUE

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:

• (a) the Company will offer the Shares for issue without disclosure to investors under Part 6D.2 of the Act;

• (b) the Company is providing this notice under paragraph 2(f) of section 708AA of the Act;

• (c)

• as at the date of this notice, the Company has complied with:

• i. the provisions of Chapter 2M of the Act as they apply to the Company; and ii. section 674 of the Act; and

• (d) as at the date of this notice there is no information:

• i. that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• ii. 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

• (e) 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.

Yours sincerely

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Lindsay Dudfield Executive Director

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

ENERGY METALS LIMITED ABN

63 111 306 533

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Shares
	1,415,866 (if all existing options are exercised, maximum is 1,958,493)
	Fully Paid Ordinary Shares

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 1

Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (_including_the securities in clause 2 if applicable)	Yes	Yes
	$3.50 per share
	Funds raised from the issue will be applied to working capital and to promote further exploration and development of the Bigrlyi Uranium Project and the Company’s 100% owned uranium projects in the Northern Territory and Western Australia.
	21 December	2007
	Number	+Class
	29,733,187 8,507,542	Ordinary fully paid Listed Options (ASX Code EMEO)

• See chapter 19 for defined terms.

Appendix 3B Page 2

24/10/2005

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	400,000 1,250,000 165,000 200,000 330,000	Unlisted 30¢ options expiring 30/06/2008 (ASX Code EMEAK) Unlisted 35¢ options expiring 30/06/2010 (ASX Code EMEAM) Unlisted $1.00 options expiring 30/06/2011 (ASX Code EMEAO) Unlisted $2.00 options expiring 30/06/2011 (ASX Code EMEAQ) Unlisted $3.00 options expiring 30/06/2011(ASXCodeEMEAS)
	N/A

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	Non-renounceable
	One (1) Share for every Twenty (20) ordinary fully paid sharesheld
	Ordinary shares
	28 November 2007
	No
	Rounded down
	Canada, United Kingdom, Great Britain, Hong Kong, Ireland, Malaysia, Singapore, Thailand and the United States of America.
	13 December 2007

• See chapter 19 for defined terms.

Appendix 3B Page 3

1/1/2003

Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance?	Hartleys Limited
	5% of total amount raised
	N/A
	N/A
	N/A
	N/A
	29 November 2007
	12 November 2007
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

Appendix 3B New issue announcement

• 32 How do[+] security holders dispose of their entitlements (except by sale through a broker)?

N/A

• 33 +Despatch date

21 December 2007

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a)[Securities described in Part 1 ]

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35[If the ][+][securities are ][+][equity securities, the names of the 20 largest holders of the ] additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 1 - 1,000

• 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37[A copy of any trust deed for the additional ][+][securities ]

• See chapter 19 for defined terms.

Appendix 3B Page 5

1/1/2003

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) 42 Number and+class of all+securities quoted on ASX (_including_the securities in clause 38)
	Number	+Class

• See chapter 19 for defined terms.

Appendix 3B Page 6

1/1/2003

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: Date: 12 November 2007 (Company secretary)

Print name: Trish Farr

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• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 7