ATHABASCA URANIUM ANNOUNCES PRIVATE PLACEMENT

NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR DISSEMINATION IN THE UNITED STATES

          TSXV: UAX
US Symbol:  ATURF

VANCOUVER, Sept. 29 /CNW/ - Athabasca Uranium Inc. (the "Company") is pleased to announce that it has arranged a non-brokered private placement (the "Placement") in the capital of the Company for gross proceeds of up to $2,100,000.

The Placement is comprised of up to 5,714,286 Flow-Through Shares offered at a subscription price of $0.28 per Flow-Through Share and up to 2,000,000 Units offered at a subscription price of $0.25 per Unit.  Each Unit is comprised of one common share (a "Share") and one common share purchase warrant (a "Warrant") of the Company. Each Warrant entitles the holder to purchase one additional Share of the Company (a "Warrant Share") at an exercise price of $0.35 per Warrant Share for a period of one year after the Closing Date. All Shares issued pursuant to the Placement and any Warrant Shares issued in connection with the exercise of Warrants will be subject to a hold period in accordance with the policies of the TSX Venture Exchange and applicable securities laws.

Finders' fees may be paid on all or portions of the Placement in the form of a cash commission equal to 7% of the gross proceeds of the Offering and issuance to the Finder of non-transferable share purchase warrants ("Finder's Warrants") equal to 7% of the number of Common Shares sold under the Offering. Each Finder's Warrant will entitle the Finder to purchase one common share of the Company at a price of $0.35 for a period of 12 months after the Closing Date. 

Proceeds of the Placement will be used to fund exploration programs on the Company's McCarthy and Webb River uranium properties located in northern Saskatchewan, and for general working capital purposes. 

The proposed Placement and associated finder's fees are subject to regulatory approval.

About Athabasca Uranium

Athabasca Uranium Inc. is a uranium exploration and development company acquiring and exploring properties located in the uranium-rich Athabasca Basin in northeast Saskatchewan.  The Company's stated vision is to explore the region using leading-edge technology to become a world-class uranium mining company.  Additional information on Athabasca Uranium and its vision is available on the Company's website at www.athabascauranium.com.

ON BEHALF OF THE BOARD OF DIRECTORS

   "Gil Schneider"

Gil Schneider, President & CEO

Cautionary Statements

This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans.  Actual results may differ materially from those projected by management.

This news release does not constitute an offer to sell or solicitation of an offer to sell any of the securities in the United States.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

For information, please contact the Company:

Toll-Free: [phone]

E-mail:     [email protected]