(15-20 min delay)
Mega Uranium Ltd.
211 Yonge Street, Suite 502
Toronto, Ontario, Canada
2007 News Releases
Mega Uranium Ltd. Releases Unaudited Results For The Three And Six Months Ended March 31, 2007
May 15, 2007
- Develops Existing Properties in Australia and Mongolia While Adding Properties in Canada;
- Completes Private Placements - Well Positioned For Future Acquisitions and Exploration Activities
TORONTO, Ontario (May 15, 2007) – Mega Uranium Ltd. (“Mega”) (TSX: “MGA”) today announced its unaudited results for the three and six months ended March 31, 2007.
As at March 31, 2007, Mega had cash, cash equivalents and marketable securities totaling $95.2 million as compared to $41.3 million at the end of September 30, 2006 an increase of 130.5%. The increase in the Company’s cash position was due primarily to net proceeds from financing activities totaling $44.0 million and the exercise of stock options and warrants totaling $8.2 million. As at March 31, 2007, the Company had mineral properties and related expenditures of $195.8 million as compared to $44.4 million as at September 30, 2006.
Results for the three months ended March 31, 2007 as compared to three months ended March 31, 2006:
- Revenue increased to $5,086,677, consisting primarily of $2,336,750 in gains on disposal of investments in public companies, $1,493,990 in unrealized gains on investments in public companies and $718,804 of interest income. This compares to a net reversal of interest income of $39,814 for the three months ended March 31, 2006.
- Total expenses were $5,782,848 (2006 - $3,488,158), which included operating, general and administrative expenses of $1,556,002 (2006 - $628,025) and stock-based compensation of $4,261,044 (2006 - $2,855,417).
- Net loss in the quarter was $1,298,009 ($0.01 per basic common share) as compared to a net loss of $3,527,972 ($0.04 per basis common share) for the three months ended March 31, 2006.
Results for the six months ended March 31, 2007 as compared to the six months ended March 31, 2006:
- Revenue was $11,895,770 consisting primarily of $2,336,750 in gains on disposal of investments in public companies, $7,688,813 in unrealized gains on investments in public companies and $1,266,755 of interest income. This compares to total revenue (all interest) of $248,692 for the six months ended March 31, 2006.
- Total expenses were $9,970,884 (2006 - $5,007,609 ) which included operating, general and administrative expenses of $3,567,702 (2006 - $1,371,947) and stock-based compensation of $6,929,859 (2006 - $3,645,372).
- Net income was $3,146,552 ($0.02 per basic common share) as compared to a net loss of $4,758,917 ($0.06 per basis common share) for the six months ended March 31, 2006.
Mr. Sheldon Inwentash, Chairman and CEO of Mega, stated, “In anticipation of the change in policy in Australia, we focused on further developing our Australian properties, specifically our near term Lake Maitland and Ben Lomond projects. We are pleased with our initial work and look forward to reporting our findings to you in the coming months.” He continued, “Our strong cash position was strengthened during the quarter with the completion of a private financing, enabling us to further develop our properties and form valuable project partnerships. We will continue to build our quality property portfolio through partnerships and acquisitions. We executed against this strategy during the quarter with the completion of one acquisition and the announcement of our intentions to complete two more.”
Acquisition and Project Activity
In January 2007, Mega’s wholly-owned subsidiary, Redport Ltd. (“Redport”), signed a Land Access Agreement (“LAA”) and Land Exploration Agreement (“LEA”) under Native Title Legislation with the Western Desert Lands Aboriginal Corporation (“WDLAC”) in Western Australia. The LAA covers the Kintyre Rocks Project exploration tenement applications, which are located adjacent to Rio Tinto Ltd’s Kintyre uranium resource (79 million pounds U3O8), and other ground held by Cameco Australia Pty Ltd. The Agreements pave the way for Mega to commence ground investigations of its Kintyre Rocks Project tenements.
During the quarter, Mega’s wholly owned subsidiary, Mega Georgetown Pty. Ltd. (“Mega Georgetown”), entered into a binding Letter Agreement with Glengarry Resources Ltd. (“Glengarry”) to acquire its uranium interests in 1921 km2 of ground located in Queensland, Australia, approximately midway between Mega’s Ben Lomond and Georgetown Projects. Under the Agreement, the uranium interests were acquired for a total consideration of 750,000 Mega shares, which are subject to a four month escrow period. In addition, Glengarry will receive a 1% net smelter royalty (“NSR”) on any uranium production from the ground that is subject to the Agreement.
Mega and its partner Red Hill Energy announced that preparations for the 2007 Mongolian uranium exploration season were underway and field work would commence as soon as weather permits on the property portfolio of 219,862 hectares.
In February 2007, Mega also completed the acquisition of Twenty Seven Capital whose primary assets are its uranium and iron-oxide copper-gold (IOCG) properties in the Wernecke Mountains of the Yukon, considered to be one of the most prospective uranium areas in Canada.
Also in February, Mega announced that it would be fast tracking the development studies of its 100% owned Lake Maitland uranium project in Western Australia. Planned work includes the commencement of a scoping study to identify the preferred processing option; a review of infrastructure requirements and potential socio-economic benefits which is to start in near future; a program to upgrade the current resource which is underway; and forming a team of uranium experts to oversee the program.
Mega announced that Golders Associates Ltd has commenced a pre-feasibility study of its Ben Lomond uranium-molybdenum resource in Queensland, Australia, with a view to determining the project economics, the preferred mining and processing options and the key steps in mine development.
Mega also reported drilling results in the first batch of assay results received from 11 holes in the 50 hole, 3895 metre RC/diamond core validation drilling programme undertaken on its Maureen uranium resource in the last quarter of 2006. Mega’s President Stewart Taylor commented that the results validated previous drilling undertaken by Getty in the late 1970s. For more detailed drill results see Mega’s press release dated February 22, 2007.
During the quarter, Mega strengthened its relationship with Titan Uranium Incorporated. (“Titan”) (TSX-V: TUE), announcing a binding letter of intent (“LOI”) between the two companies. Under the LOI, Mega will acquire an option to earn a 51% legal and beneficial interest in Titan’s entire leasehold land position in the Thelon Basin in the Nunavut Territory, Canada with a view to the creation of a joint venture partnership on future exploration and exploitation of uranium assets in the Thelon Basin.
Mega entered into a binding letter agreement with Monster Copper Corporation (MNS-TSXV) (“Monster”) whereby Mega will acquire all of the outstanding securities of Monster in exchange for common shares and common share purchase warrants of Mega. Monster is a publicly-listed uranium exploration company with prospective uranium exploration projects in the Central Mineral Belt of Labrador, Canada. In addition, it has properties with potential for Iron Oxide Copper Gold (IOCG) and lateric nickel deposits in the Carajas Region of Brazil.
Finally, subsequent to the quarter, Mega announced it had entered into a binding letter of intent whereby Mega will acquire all of the outstanding shares of NU Energy (NU-TSXV) in exchange for common shares of Mega. NU Energy is a publicly-listed uranium company which owns a 92% interest in the Kitongo and Lolodorf uranium properties located in the Republic of Cameroon, Africa. NU Energy is also reviewing opportunities with Edlow Resources Limited and Africa Nuclear Fuel concerning the sourcing, purchasing, transportation and upgrading of low-grade uraniferous secondary material and the subsequent marketing of the upgraded product.
During the quarter, Mega completed two private placement financings for total gross proceeds of $35.2 million, following a financing in Q1 which provided gross proceeds of $11.8 million.
Stewart Taylor, Mega’s President and Qualified Person under NI43-101, is responsible for this release and has verified the contents disclosed.
ABOUT MEGA URANIUM
Mega Uranium Ltd. is a Toronto-based mineral resources company with a focus on uranium properties in Australia, Argentina, Mongolia, Columbia, 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.
For further information, please contact:
VP Corporate and Legal Affairs Director of Corporate Communications
T: (416) 643-7630
Director of Corporate Communications
T: (416) 860-1717