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Mega Uranium Ltd.
211 Yonge Street, Suite 502
Toronto, Ontario, Canada
2008 News Releases
Mega Uranium Ltd. Releases Unaudited Results For The Three And Nine Months Ended June 30, 2008
August 12, 2008
TORONTO, Ontario (August 12, 2008) – Mega Uranium Ltd. (“Mega”) (TSX: “MGA”) today announces its unaudited results for the three and nine months ended June 30, 2008.
Summary Financial Results
As at June 30, 2008, Mega had cash, cash equivalents and marketable securities totaling $63.0 million as compared to $114.0 million at the end of September 30, 2007. As at June 30, 2008, the Company had mineral properties and related expenditures of $498.2 million as compared to $466.9 million as at September 30, 2007. The increase is primarily due to Mega’s cash expenditures for exploration activities on its mineral properties and the acquisition of Energentia Resources Inc.
Selected results for the three months ended June 30, 2008 as compared to the three months ended June 30, 2007:
- Financial loss was $1,028,000 as compared to financial income of $1,647,000 for the three months ended June 30, 2007. The financial loss was due primarily to unrealized losses on investments in public companies.
- Total operating, general and administrative expenses were $2,518,000 as compared to $1,786,000 for the three months ended June 30, 2007.
- Net loss in the quarter was $13,741,000 ($0.07 per common share) as compared to a net loss of $3,517,000 ($0.03 per common share) for the three months ended June 30, 2007.
Selected results for the nine months ended June 30, 2008 as compared to the nine months ended June 30, 2007:
- Financial loss was $3,261,000 as compared to financial income of $13,543,000 for the nine months ended June 30, 2007. The financial loss was due primarily to unrealized losses on investments in public companies.
- Total operating, general and administrative expenses were $7,516,000 as compared to $5,354,000 for the nine months ended June 30, 2007.
- Net loss in the quarter was $36,625,000 ($0.20 per common share) as compared to a net loss of $6,289,000 ($0.05 per common share) for the nine months ended June 30, 2007.
Effective May 6, 2008, Mega completed its acquisition of Energentia Resources Inc., (“Energentia”) a junior mineral exploration company with uranium properties in Colombia, some of which are adjacent to other tenements owned by Mega. Formerly a TSX Venture-listed company, Energentia is now a wholly-owned subsidiary of Mega. As consideration for the acquisition of all of the outstanding shares of Energentia, Mega issued an aggregate of 7,208,300 common shares to Energentia shareholders. Additionally, an aggregate of up to 773,300 common shares of Mega are issuable pursuant to the exercise of outstanding stock options and common share purchase warrants of Energentia, which were assumed by Mega upon completion of the acquisition.
During the quarter, Mega reported on project activity as follows;
In an update on its ongoing prefeasibility studies of its Ben Lomond and Lake Maitland uranium resource projects in Australia, Mega reported that feasibility studies and site work on both projects are well advanced and on schedule to prepare them for uranium production in 2010 (Lake Maitland) and 2011 (Ben Lomond), subject to State and Federal Government approval and the granting of a uranium export licence. For more detailed information see Mega’s press release of April 7, 2008.
Mega reported the remaining assay results from the 2007 drill program at the Igor iron-oxide copper-gold uranium property, located in the Wenecke Uranium District, Yukon, which is part of a Joint Venture with Cash Minerals Ltd. Significant intersections from this last batch of analyses include:
- Hole IG07-26 4.40 metres @ 0.132% U3O8, 7.24% Cu, 0.21 g/t Au, and 6.79 g/t Ag and 4.00 metres @ 0.045% U3O8, 2.53% Cu, 0.14 g/t Au, and 2.17 g/t Ag
Refer to Mega’s press release dated April 21, 2008.
Mega announced the completion of the winter drill program on the Maurice Point property in the western Athabasca Basin. The property is under an option agreement with Forum Uranium Corp. whereby Mega can earn a 55% interest by spending $8 million over three years. Drilling was successful in intersecting a major fault zone accompanied by strong hydrothermal alteration that is continuous from surface to a depth of 250m. A total of 10 holes for 2,321 meters were completed in the Colin River and the Beach target areas. For more detailed information see Mega’s press release dated April 22, 2008.
Mega reported that it had increased its uranium property interests in Colombia, through a farm-in agreement with AngloGold Ashanti Colombia SA, and applications for additional tenements in the Chaparral area of Tolima Province and the Abejorral area of Antioquia Province. In addition, Mega reported that the Berlin uranium deposit, the main asset acquired in its takeover of Energentia Resources, contains a historical resource of 38 million pounds U3O8 at a grade of 0.13% U3O8. Further information can be found in Mega’s news release of May 12, 2008.
In the Poplar Project in the Athabasca Basin, in which Mega is earning a 50% interest from Canalaska Resources, Canalaska reported the completion of a helicopter-borne magnetic and electromagnetic survey. The survey has successfully identified a large number of unconformity-related conductors and structural breaks in areas that have lacked detailed prior exploration. For more detailed information see Mega’s press release dated May 27, 2008.
Mega reported results of the drill program on the Mustang Lake property, which is part of a 50:50 joint venture with Santoy Resources Ltd. with Mega as the operator. The current phase of drilling tested an interpreted northeast-trending structural zone. Such zones of deformation within the Aillik Group volcanic stratigraphy are considered to collectively trend from Aurora’s Michelin deposit (located 8 km to the southwest) through the Mustang Lake property. Drilling at Mustang Lake was successful in intersecting both shear systems and uranium mineralization associated with hydrothermal altered host rocks. More detailed information can be found in Mega’s press release dated June 12, 2008.
The overall budget for Mega’s 2008 exploration program in Labrador was adjusted from approximately $9 million to $4.5 million, principally by the postponement of a significant drill program on the 100% owned Aillik East property. This adjustment is due to the uncertainty surrounding a recent moratorium on uranium mining enacted by the Nunatsiavut Government. While Mega has reduced its overall budget, the company is committed to a long term view in Labrador that includes fostering a relationship and continuing a dialogue with local communities and the Nunatsiavut Government.
Mega announced that a 5,000 meter reverse circulation drilling program had commenced at its Kintyre Rocks property in Western Australia, which is adjacent to tenements containing Rio Tinto Ltd’s 79 million U3O8 Kintyre uranium resource. For more detailed information see Mega’s press release dated June 17, 2008.
In Argentina, progress was reported on the investigation of the shallow uranium resource potential of unconsolidated Quaternary pebbly conglomerates in the Laguna Salada tenements of the Patagonia Project in Chubut Province. The exploration to date has included 182 shallow trenches and 11 drill holes (to 8-10 meters depth) in the Guanaco prospect area, and 87 trenches and 4 drill holes in the Lago Seco prospect area. Based on the results of the trenches and drill holes, Mega estimates that the 15 km2 area of the Guanaco prospect explored to date contains potential for delineating a resource of the order of 5-8 million pounds U3O8 with an average grade of the order of 100-140 ppm U3O8. The mineralisation is open to the southeast where a 15km2 area of the Quaternary terrace remains to be investigated by trenches. In the Lago Seco prospect, it is estimated that the 4.6km2 area explored to date contains potential for delineating a resource of the order of 2-3 million pounds U3O8 with an average grade of 120-160ppm U3O8 and that additional potential exists in a 6km2 portion of the Quaternary terrace to the south. Although the mineralisation is thin (1-1.2 meters) and low grade, Mega believes that it is amenable to low cost mining and beneficiation, due to its occurrence on surface or at <0.3 meter depth, its flat-lying continuous nature over an extensive area, and its presence within the matrix of unconsolidated conglomerates, which renders it suitable for beneficiation by a simple screening process. For further information, refer to Mega’s news release of May 12, 2008.
Mega’s joint venture partner, Aura Energy Ltd. (AEE-ASX) (“Aura”) reported encouraging results in its initial reconnaissance drill testing of buried palaeochannels in the Gunbarrel Basin of Western Australia. In the Kirgella Rocks tenements, 33 air core holes were drilled at 800 meter intervals on eight northeast-trending lines transecting the interpreted palaeochannel at a spacing of some 5–10 kilometers. The widely-spaced holes successfully delineated the palaeochannel and intersected anomalous uranium within favorable carbonaceous host rocks. Further information can be found in Mega’s news release of July 2, 2008.
A revised NI43-101 compliant ore resource estimate for the Maureen deposit, in the Georgetown Project, Queensland, Australia, was received from Mining Associates Pty. Ltd. of Brisbane. At a 0.02% U3O8 cut-off, the Maureen deposit is reported to contain an Indicated Resource of 5.95 million pounds (Mlbs) U3O8 and an Inferred Resource of 0.38 Mlbs U3O8. Further details on the Maureen deposit and the ore estimation method can be found in the report available under the Company’s profile on SEDAR at www.sedar.com.
Stewart Taylor, Mega’s President and Qualified Person under NI43-101, is responsible for the information on acquisition and exploration activity in 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, Canada, Argentina, Bolivia, Colombia, Mongolia and Cameroon. 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 Ben Lomond, Maureen and Lake Maitland, are subject to State policies which presently prohibit the mining of uranium.
For further information, please contact:
Mega Uranium Ltd.
VP Corporate and Legal Affairs
T: (416) 643-7630