Mega Uranium Mining & Exploration in  Canada, Cameroon, Australia, Argentina, Bolivia, Columbia and Mongolia.

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Mega Uranium Ltd.
211 Yonge Street, Suite 502
Toronto, Ontario, Canada
M5B 1M4

Phone 416.643.7630
Fax 416.941.1090
 

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2006 News Releases

Mega to Acquire Twenty-Seven Capital Corp.


October 31, 2006

Not For Distribution to US Newswire Services or for Dissemination in the United States

Toronto, Ontario, Canada, October 31, 2006 – Mega Uranium Ltd. (MGA-TSX) (“Mega”) announces that it has entered into a binding letter agreement with Twenty-Seven Capital Corp. (“TSC”) whereby Mega will acquire all of the outstanding securities of TSC in exchange for common shares and share purchase warrants of Mega (the “Transaction”). TSC is a publicly-listed uranium exploration company (TSC-TSXV) with extensive uranium prospective land holdings in the Yukon Territory. 

Highlights of the Transaction

The common shares of TSC will be acquired for consideration of: (a) one common share of Mega and (b) one-half of one Mega common share purchase warrant in exchange for each three (3) TSC common shares. Each whole Mega common share purchase warrant (a “Mega Warrant”) will entitle the holder to acquire one Mega common share for a purchase price of $6.00 per share for a period of 5 years from the date of issuance. As of October 30, 2006, on a fully diluted basis, there are 20,296,122 common shares of TSC.

Mega’s President, Mr. Stewart Taylor, stated that, “following the recent completion of Mega’s $11.875 million flow-through financing, Mega is pleased to initiate the deployment of these funds in the ground being acquired from TSC, our first acquisition in Canada. TSC holds a very prospective portfolio of properties prospective for uranium and has a strong management and technical team. The acquisition of TSC will give Mega a foothold in one of the most prospective uranium areas in Canada. The acquisition will also complement Mega’s existing advanced uranium portfolio in Australia, significantly enhancing Mega’s holdings in the world’s leading uranium producing countries. We look forward to working with the TSC team who will bring considerable expertise to Mega’s expanding Canadian projects.” 

The transaction will proceed by way of a three-cornered amalgamation, whereby a wholly-owned subsidiary of Mega will amalgamate with TSC, such that Mega will issue common shares and warrants to the former shareholders of TSC in the foregoing basis and the company resulting from the amalgamation of TSC and the Mega subsidiary will become a wholly-owned subsidiary of Mega. The common shares of TSC will be de-listed from the TSX Venture Exchange on closing of the Transaction.

Mega and a major shareholder of TSC have also entered into a support agreement whereby that shareholder, which currently holds approximately 33% of the outstanding common shares of TSC, has agreed to vote its shares in favour of the proposed transaction.

Based on Mega’s 5-day weighted average closing price of $4.72, the consideration for each TSC common share is equal to $1.57 plus, for each Mega share paid to the TSC shareholders, one half of one $6.00, 5 year Mega Warrant.

Completion of the Transaction is subject to a number of conditions, including, but not limited to, completion of due diligence, the receipt of all required approvals, including approval of the Toronto Stock Exchange, the TSX Venture Exchange, and approval of the shareholders of TSC. There can be no assurance that the Transaction will be completed as proposed or at all. It is intended that a meeting of the shareholders of TSC will be held as soon as possible to approve the transaction and it is anticipated that this meeting will be held before the end of the 2006 calendar year.

Mega intends to continue to the operations of TSC, including the employment of TSC’s management team and geological team.

Pacific International Securities Inc. is acting as financial advisor to Mega with respect to the Transaction and will be paid a retainer fee of $25,000, plus, subject to required regulatory and exchange approvals, a success fee of 100,000 units of Mega upon successful completion of the Transaction. In the event that such approvals are not received, an equivalent success fee will be paid in cash.

Upon successful completion of the Transaction, Mega will issue approximately 6,765,374 common shares and 3,382,687 warrants. Mega currently has 110,998,808 common shares issued and outstanding as at the date of this news release. 

About Twenty-Seven Capital

Twenty-Seven Capital Corp. is a junior mining company exploring for uranium and iron-oxide copper-gold (IOCG) deposits. It holds ten significant projects in Yukon, two in British Columbia, and one in each of the Northwest Territories and Mexico.  Twenty-Seven Capital's primary assets are its uranium and IOCG properties in the Wernecke Mountains of Yukon, which are under option to Cash Minerals Ltd. (“CHX”-TSXV).  Most of the Yukon projects host uranium showings, some of which were aggressively explored in the late 1970s and early 1980s by majors before uranium prices dropped.  Four of the properties (Bond, Steel, Igor and Pike) are IOCG type deposits, where uranium occurs in association with with copper and/or gold. TSC presently has several field programs underway, as well as exploration activities being conducted by Cash Minerals.

About Mega Uranium

Mega Uranium Ltd. is a Toronto-based mineral resources company with a focus on uranium properties in Australia, Argentina, Mongolia, Bolivia and Canada. Further information on Mega can be found on the company’s website at www.megauranium.com. Mega Uranium’s Australian uranium properties, including without limitation the Ben Lomond and Maureen properties, are subject to state policies which presently prohibit the mining of uranium in Australia.

Cautionary Statements

This news release contains forward-looking statements regarding the proposed transaction by way of a plan of arrangement. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, the risks that Mega and TSC will not be able to obtain the required approvals or clearances from regulatory or other agencies and bodies on a timely basis. The forward-looking statements included in this release represent Mega’s and TSC’s views as of the date of this release. While Mega and TSC anticipate that subsequent events and developments may cause their views to change, Mega and TSC specifically disclaim any obligation to update these forward-looking statements. These forward-looking statements should not be relied up as representing the views of Mega and TSC as of any date subsequent to the date of this release.

For further information, please contact:

Mega Uranium Ltd.
Sheldon Inwentash, CEO
Telephone:     (416) 643-7630
info@megauranium.com
www.megauranium.com