2006 News Releases
Uranium Property Update
Toronto, Ontario, Canada, March 3, 2006 – Mega Uranium Ltd. (“Mega”) (“MGA”: TSXV) is pleased to provide the following progress summary in its Patagonia (Argentina), Mongolia, and Georgetown (Australia) Uranium Projects, and its takeover offer for the Australian uranium company, Hindmarsh Resources Ltd.
Patagonia Uranium Project (Argentina)
In November 2005, Mega commenced fieldwork in its 100% held Patagonia Uranium Project, in the Cretaceous-aged San Jorge Gulf Basin of Chubut Province. The exploration is being undertaken by a team of Argentinean geologists directed by Mega’s manager in Argentina, Dr. Hugo Bastias. Consulting to the team on a full time exclusive basis is Dr. Alberto Belluco, a uranium specialist with over 40 years of exploration and project evaluation experience with the National Atomic Energy Commission of Argentina (CNEA), and with the International Atomic Energy Commission in several other countries in South America.
The exploration programme thus far has comprised:
Reconnaissance ground radiometric surveys, geochemical sampling and geological mapping of various radiometric anomalies and uranium occurrences detected by the CNEA in its exploration of the region in the 1970s.
More detailed radiometric and geochemical surveys in the vicinity of CNEA’s Cerro Solo uranium resource (10.3 million pounds U3O8).
Based on the results of the reconnaissance work, Mega has relinquished one exploration permit (100km2 in area) and made applications for three new exploration permits, totaling 300 km2, in the vicinity of CNEA’s Sierra Cuadrada uranium deposit. Should the applications be granted, Mega’s ground holding in the region will be increased to a total of 2027 km2.
The new exploration permit applications cover outcrops and the the inferred shallow extensions of a 1.5 - 3m thick interval of volcaniclastic sediments in the uppermost part of the Chubut Group within an extensive area 5 - 40km northwest of CNEA’s Sierra Cuadrada uranium deposit. The volcaniclastic sediments contain ubiquitous fossilised tree trunks, with diameters up to one metre and lengths of 8 –10 metres, containing abundant uranium mineralisation. Sampling has returned values up to 0.58% U3O8 in the trunks and up to 0.18% U3O8 in the enclosing volcaniclastic sediments.
The detailed exploration work has focused on the area immediately to the east of the Cerro Solo deposit, along the inferred projection of the palaeochannel which hosts the deposit – refer to the attached figure. In this area, a detailed ground radiometric survey has delineated a 3.5km2 anomaly, with values up to 5 times the regional background, in Lower Chubut Group tuffs and sandstones, which overlie the uraniferous horizons hosting the Cerro Solo deposit. Over the radiometric anomaly, soil and rock chip sampling returned anomalous values over a 1200mx1900m area. Results are now awaited for a 20.5 line km. seismic reflection survey which was conducted over four lines in order to define the configuration and depth of the inferred palaechannel in the area of the radiometric anomaly.
A drilling programme, scheduled for April, and comprising at least 20 holes of 100m average depth, will test the palaeochannel under the principal radiometric anomaly and will also investigate other radiometric anomalies in Mega’s Condor 2 and Condor 3 properties.
Mongolia Uranium Project
In Mongolia, where Mega is earning an initial 50% interest in uranium exploration projects held by the TSXV-listed UGL Enterprises Ltd. (“UGL”) (“UGS”: TSXV), the UGL exploration team has completed its review of detailed records of previous Russian exploration in its properties, which it obtained from official sources in Irkutsk, Russia in the last quarter of 2005. As a result of this study, the option on the Nergui property has been relinquished and five UGL properties have been selected for detailed investigation in 2006 – Jargalan, Baganurat, Maikhan Tolgoi, Shorvog Gol/Adag Usnii Khudag and Ganga. With the exception of Maikhan Tolgoi, these properties all contain radiometric anomalies, uranium showings and favourable geological settings within Cretaceous stratigraphy, with potential for flat lying stratabound sandstone-hosted uranium bodies at shallow depths generally <100 metres. In the Maikhan Tolgoi property the target is shallow structurally-controlled uranium within Cretaceous volcanic host rocks.
In the field season commencing in early April, UGL will investigate targets in the five priority properties with various combinations of vertical electrical sounding surveys, IP, magnetics, ground radiometrics, AlphaCard radon surveys and soil/rock chip sampling. Areas of interest detected in this work will be drill tested later this year.
UGL’s exploration programmes will be undertaken by Mongolian geologists and field crews of the consulting group Mine-Info, directed by the Russian geologist, Grigory Kislyuchenko, under the overall supervision of UGL’s Manager in Mongolia, Glenn Griesbach. Mr. Kislyuchenko brings considerable uranium expertise to UGL, as he has 19 years uranium exploration experience with the Sosnovgeologia Uranium Company in Siberia and Mongolia.
UGL’s current uranium interests in Mongolia, all 100% held, comprise 14 properties consisting of 16 exploration licences covering a total area of 2325km2. Applications are currently being prepared for other exploration licences elsewhere over areas of uranium potential identified by Mr. Kislyuchenko.
Georgetown Uranium Project (Queensland, Australia)
In the 1580km2 Georgetown Uranium Project, in which Mega has rights to the uranium-molybdenum-fluorite mineralisation subject to a % NSR payable to the vendors, detailed drilling data of the Maureen uranium deposit are being digitized and interpreted with a view to identifying possible resource extensions for drill testing in April/May this year. Maureen contains a pre NI43-101 historical Indicated Resource of 2.38 million tonnes @ 0.12% U3O8 (6.5 Mlbs. contained U3O8) and 0.07% molybdenum. This resource estimate was competently conducted in 1979 according to the standards of the day, and as such is regarded relevant by Mega as a reasonable reflection of the magnitude and grade of the mineralization. However, as it preceded the introduction of the JORC guidelines in Australia, it must therefore be reported as unreliable at this time in accordance with the NI43-101 regulations. Mega has engaged an Independent Qualified Person to establish a resource that is NI43-101 compliant.
In addition, a comprehensive integration and review of the available airbornemagnetics/radiometrics data, over thewhole property and the immediate surrounds, has identified several radiometric anomalies and uranium occurrences,some of which occur on east-west trending structures similar to that of the Maureen resource. These areas ofinterest will be priority targets for exploration work in the forthcoming field season commencing in early April.
In mid 2006, Mega intends to undertake a detailed airborne magnetics-radiometrics survey at a line spacing of 100 metres, to highlight uranium targets within the entire Georgetown Project ground holding and the immediate surrounds.
Takeover of Hindmarsh Resources Ltd.
In its press release of January 10 2006, Mega announced it had entered into an Agreement with the Australian Stock Exchange (ASX)-listed Hindmarsh Resources Ltd (“Hindmarsh”) whereby Mega, or a wholly-owned subsidiary of Mega, would offer to acquire all the issued shares and options of Hindmarsh for a total consideration of 3.63 million Mega shares in a conditional off-market takeover offer.
The required documents for this takeover, the Bidder’s Statement (from Mega) and the Target’s Statement (from Hindmarsh), will be posted to the Hindmarsh security holders by March 10. Security holders can respond up until April 11, at which date the offer closes. The Board of Directors of Hindmarsh has indicated that it supports the takeover and will recommend that the Hindmarsh shareholders and optionholders accept it.
Since the proposed takeover was announced, Hindmarsh has added to its uranium interests by entering into an agreement to earn up to 80% of an exploration licence in the Eyre Peninsula of South Australia from InterMet Resources Ltd., a private company which is soon to be listed on the ASX. Overall, Hindmarsh holds, or is acquiring interests in, ground in Australia with uranium discovery potential, comprising over 12250km2 in South Australia and 1400km2 in the Northern Territory.
Stewart Taylor, President, Mega’s Qualified Person under NI 43-101, is responsible for the contents of this release and has verified the data disclosed.
Mega Uranium Ltd. is a Toronto–based mineral resources company with a focus on uranium properties in Australia, Argentina, Mongolia and Canada. Further information on Mega can be found on the company’s website at www.megauranium.com
This news release contains forward-looking statements within the meaning of the “safe harbour” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and other factors that may cause Mega’s results to differ materially from expectations. These include risks relating to market fluctuations, property performance and other risks. These forward-looking statements speak only as of the date hereof. Mega Uranium disclaims any intent or obligation to update these forward-looking statements and cautions investors from placing undue reliance on forward-looking statements. Mega does have an ongoing obligation to disclose material information as it becomes available.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Mega Uranium Ltd.
Sheldon Inwentash, CEO
Telephone: (416) 643-7630