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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2008 News Releases

Mega Uranium Ltd. Releases Audited Results For The Year Ended September 30, 2008


December 23, 2008

TORONTO, Ontario (December 23, 2008) – Mega Uranium Ltd. (“Mega”) (TSX: “MGA”) announces its audited results for the year ended September 30, 2008.

SUMMARY FINANCIAL RESULTS


As at September 30, 2008, Mega had cash, cash equivalents and marketable securities totaling $49.0 million, as compared to $114.0 million at the end of September 30, 2007, a decrease of 57%. The decrease reflects Mega’s high level of exploration activity during the year on properties acquired during the prior two years.

As at September 30, 2008, the Company had mineral properties and related expenditures of $283.1 million, as compared to $466.9 million as at September 30, 2007. The decrease is primarily due to property write-downs totaling $233.4 million, offset by property related expenditures of $49.6 million during the year.

Summary results for the year ended September 30, 2008, as compared to the year ended September 30, 2007:

  • Loss from financial and trading activities for the year was $12.7 million, most of which relates to unrealized losses on investments in public companies, as compared to a financial gain of $10.6 million last year.
  • Total expenses, excluding write-downs of mineral properties and related expenditures, were $31.8 million as compared to $29.3 million in the prior year.
  • Write-downs of mineral properties and related expenditures totaled $233.4 million in fiscal 2008 as compared to $1.9 million last year.
  • Net loss in the year was $195.5 million ($1.07 per common share), as compared to a net loss of $16.2 million in the previous year ($0.11 per common share).

“The twelve months ended September 2008 was a very challenging period for uranium explorers worldwide. The state of the commodity and capital markets specifically, and the global economy in general, has put pressure on exploration companies to focus their activities and conserve their cash resources”, commented Sheldon Inwentash, Mega’s CEO. “We spent much of fiscal 2008 exploring our newly acquired properties in order to be able to concentrate on those that represent better growth opportunities for the Company in the coming year. We are very well financed, and are now focusing our efforts on developing our properties in Western Australia in light of the very positive political changes which took place there in the last several months, resulting in that state’s anti-uranium mining policy being rescinded. We look forward to a very exciting year as we advance our projects in Western Australia.”

ACQUISITION ACTIVITY

In the prior year, Mega executed an aggressive global growth strategy, acquiring five uranium exploration companies active in Australia, Canada and Cameroon. During the current year, Mega primarily focused on exploration of its existing properties, and completed one further acquisition in May 2008 when it acquired the then TSXV-listed Energentia Resources Inc., in a share-exchange transaction. Energentia’s principal asset in its 624km2 of tenements in Colombia is the Berlin uranium deposit in Caldas Province. In 1981, the French company Minatome reported that Berlin contains a resource potential of 12.9 million tonnes @ 0.13% U3O8 based on adits and nine widely spaced drill holes. Berlin comprises a 1-3 metre thick, concordant layer of uranium mineralisation in Lower Cretaceous carbonaceous and phosphatic shales in a syncline, 12km long and 0.5-2km wide. Only the southernmost 5.5km long portion of the syncline has been tested by drilling. The Berlin resource estimate is historical and is reported in Castano, R. (1981), Calcul provisoire des reserves geologiques de Berlin, sur la base des resultats des sondages, unpublished Minatome report, 15p. Recent independent verification of the historical data has not been performed and sufficient exploration work has not been completed to verify the historical estimate. Mega is not treating the historical estimate as current mineral resources and it should not be relied upon. As the 38 million pound U3O8 estimate is based only on 11 widely spaced drill holes, it is regarded by Mega as merely an indication of the magnitude of the uranium resource potential of the southernmost 5 kilometre long portion of the syncline containing the Berlin uranium mineralization.

PROJECT ACTIVITY

Throughout the year, Mega reported progress in its worldwide uranium exploration and resource development projects. Highlights are summarized below. Pending drilling results are expected to be reported in January 2009. Further details can be found on Mega’s website at www.megauranium.com

Australia

  • There are no longer any political impediments to uranium mining in Western Australia, following the defeat of the Labor Party in the Western Australia State election of September 2008 and the subsequent removal of the ban on uranium mine development by the new Liberal/National coalition government.
  • In Mega’s Lake Maitland project in Western Australia (inferred resource 23.7 million pounds U3O8), prefeasibility studies and site construction are well advanced with a view to achieving uranium production in late 2011. On October 21 2008, Mega announced that it had received a positive preliminary economic assessment (first pass scoping study) of the Lake Maitland resource. For the preferred development option, based on mining the >200ppm U3O8 resource to produce 1.65 million pounds U3O8 per year, and assuming a sale price of $US75 per pound U3O8, the key results are:
    • capital expenditure of $US85.1 million.
    • An average operating cost of $US16.60 per pound U3O8
    • NPV of $US181.4 million
    • IRR of 43.4%
The scoping study is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves and there is no certainty that the preliminary assessment will be realized.
  • In the Ben Lomond project in Queensland, prefeasibility studies and site construction continued with a view to prepare the deposit for early production should the current Queensland State anti-uranium policy be abolished. The deposit contains an indicated resource of 7.9 Mlbs U3O8 and an inferred resource of 2.8Mlbs U3O8.
  • In the Georgetown project of Queensland, Mega conducted RC/diamond core drilling of the Maureen resource in order to upgrade it to NI43-101 status. On July 7 2008, Mega announced a new NI43-101 compliant resource comprising:
    • Indicated: 3.12 million tonnes @ 0.09% U3O8 (5.949Mlbs)
    • Inferred: 0.154 million tonnes @ 0.11% U3O8 (0.382Mlbs)
  • Also in the Georgetown Project, Mega reported encouraging intersections in an 8 hole test of the Lineament prospect some 30km south of the Maureen resource. Results included 12 metres @ 0.09% U3O8 from 117 metres and 7 metres @ 0.09% U3O8 from 167 metres. Results are awaited from a follow-up drilling programme.
  • In the Oasis project, located adjacent to and southeast of the Georgetown project, a 10 hole RC drilling programme failed to find strike or depth extensions to the Oasis deposit. Previous drilling of the deposit had intersected a 330 metre long, up to 15 metres thick, steeply dipping zone of uranium mineralisation, with an average grade of 0.10-0.15% U3O8, which extended to 175 metres depth. An airborne magnetic-radiometric survey of the Oasis project identified a number of previously untested radiometric anomalies, but ground checking found none worthy of drill testing.
  • In the Kintyre Rocks project, adjacent to Cameco’s 79Mlbs U3O8 Kintyre resource, an RC drilling programme, testing the interpreted southeast projection of the Kintyre host rocks, intersected host lithologies of carbonaceous and chloritic schists, but no significant radioactivity was detected.
  • In the Gunbarrel Basin of Western Australia, where Mega can earn a 70% interest in 3750km2 of tenements from the ASX-listed Aura Energy Ltd, a helicopter-borne EM-magnetic survey delineated interpreted buried palaeochannels in the Kirgella Rocks and Carlon areas. Drill testing of the Kirgella Rocks area, at 800 metre intervals on 8 lines at 5-10km spacing, intersected anomalous uranium values in carbonaceous sands and gravels.
  • 58 widely spaced rotary mud holes were drilled in the Cronje Dam project in South Australia to investigate the potential for sediment-hosted uranium. Previous drilling by other explorers had returned encouraging results, including 3 metres @ 507ppm U3O8 from 105 metres depth.
  • A 2000 metre RC drilling programme in the Corunna North Project of South Australia tested the uranium potential of IP anomalies along the Middle/Lower Proterozoic contact. Only weakly anomalous uranium values were intersected.
Columbia
  • Mega increased its property interests in Colombia through the acquisition of Energentia Resources Inc. (reported above), applications for the Chaparral and Abejorral tenements in the Central Cordillera and a farm-in agreement with AngloGold Ashanti Ltd. to earn a 75% interest in the uranium content of 5975km2 of that company’s properties in the Central Cordillera.
  • Reconnaissance mapping and ground radiometrics in the Betulia concession delineated several layers of uranium mineralisation within sandstones of the Jurassic Giron Formation.
Argentina
  • Mega increased its ground holdings in Argentina with the application for three tenements in San Luis Province and farm-in agreements to ground adjacent to the Laguna Salada prospect in its Patagonia project in Chubut Province.
  • The main focus of activity in Argentina was the Laguna Salada prospect, where trenching and limited shallow drilling completed to date delineated potential for a 7-11 Mlbs U3O8 resource within unconsolidated surficial pebbly conglomerates within an extensive Quaternary terrace. Additional potential remains to be investigated in the southern half of the terrace. The mineralized layer is flat-lying, 0.7-1 metre thick, averages 120-140 ppm U3O8 and comprises carnotite and autunite within the fine–grained sandy matrix. Mega is assessing the economic viability of this mineralisation as it is amenable to low cost mining and beneficiation due to:
    • its occurrence on surface or at <0.3 metre depth.
    • its continuity over an extensive area.
    • its presence within the matrix of unconsolidated sediments, which renders it suitable for low cost beneficiation by a simple screening process.
The potential quantity and grade of the resource is conceptual in nature, however, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as mineral resource.
Bolivia
  • Ground follow-up of radiometric anomalies and other areas of interest continued in the Altiplano, which has potential for ignimbrite-hosted uranium mineralisation similar to the Macusani Belt of southern Peru, and in the Precambrian Belt in the eastern part of the country, where the target is unconformity-related mineralisation.
  • The Mega-Intrepid Mines joint venture, in which Mega holds a 75% interest, entered into an agreement with a private vendor to earn a 96% interest in the 6.25km2 Ana Lis claim, which covers the known uranium mineralisation in the Manomo carbonatite intrusion in the Precambrian Belt.
Mongolia
  • Mega earned a 50% interest in uranium exploration properties held by Red Hill Energy Inc (“Red Hill”). Exploration programmes are now being funded on a 50-50 basis by Mega and Red Hill. Red Hill continues as the project manager.
Cameroon
  • Interpretation of extensive airborne magnetic-radiometric surveys, covering 6100km2 of the Kitongo, Lolodorf and Teubang properties and adjacent areas, identified numerous radiometric anomalies which have been followed up by mapping and sampling. A number of prospects have been selected for drill testing.
  • Diamond drilling was conducted along a 300 metre strike length of the Kitongo fault scarp which marks the contact between the Kitongo Granite and Middle Proterozoic metasediments. The drilling investigated uranium mineralisation intersected by the German BGR in 1983/84. Mineralisation occurs as uraninite in the form of disseminations in wide zones of albitised granite and in veins. Geochemical results are awaited. Diamond drilling also commenced in the Mayo Nielse prospect in the Kitongo project and in the Lolodorf project. Results are awaited.
Canada
  • In the Central Mineral Belt of Labrador, an 8 hole, 2,215 metre winter drill program was completed on the Mustang Lake property (joint venture with Santoy Resources where Mega is the operator). This phase of drilling tested a northeast trending structural zone in the vicinity of a 2006 drill intercept of 0.12% U3O8 over 9.11 metres. All holes intersected hydrothermally altered metavolcanics characterized by the presence of secondary magnetite and hematite associated with zones of shearing though no holes intersected any significant mineralization.
  • In April 2008, the Nunatsiavut Government of Labrador enacted a three year moratorium on uranium mining and, as a result, Mega adjusted its Labrador budget from approximately $9 million to $4.5 million, principally by the postponement of a significant drill program on the 100% owned Aillik East property. Field work continued on other Labrador projects and pending results are expected to be reported in January 2009.
  • A 10 hole, 2,321 metre winter drill program was completed on the Maurice Point property which is located on the north west side of the Athabasca Basin in Saskatchewan. The property is under option from Forum Uranium Corp. where Mega can earn a 55% interest in the project by spending $8 million over three years. Forum is the operator. Drilling was successful in intersecting a major fault zone accompanied by strong hydrothermal alteration which is continuous from surface to a depth of 250m. Alteration of this magnitude is comparable in size and style to that associated with known basement-hosted uranium deposits in the Athabasca Basin such as Cameco’s Millennium deposit.
  • In early 2008, Cash Minerals Ltd. elected to earn a 75% interest in the Igor uranium-copper-gold property which is located in the Wernecke Uranium District, Yukon. The Igor property is being explored under the terms of the Yukon Uranium Project agreement between Cash and Mega. As part of its election, Cash paid Mega $1,000,000 and can maintain a 75% working interest in the Igor property provided it completes a bankable feasibility study on the Igor property by December 31, 2012.
  • On the Thelon project (an Athabasca analogue) Mega fulfilled its earn-in obligations for a 51% working interest in the property. In the 2008 summer field program, a total of 1,244 metres of diamond drilling was completed in 12 holes. Drilling tested 6 targets, representing the interpreted bedrock sources of glacially dispersed uranium-bearing boulders which form linear boulder trains. Drill hole R22-08-01 intersected a 10.70 metre interval of radioactivity associated with a fracture zone developed in mudstone adjacent to quartzite. The best analytical result was 0.19% U3O8 over 0.40 metres. No anomalous radioactivity was noted in the other drill holes.
  • Mega completed a helicopter-borne magnetic and high powered transient electromagnetic survey (VTEM) on the Poplar Project located on the northern rim of the Athabasca Basin, Saskatchewan. The survey has successfully identified a large number of unconformity-related conductors and structural breaks in areas which have lacked detailed prior exploration. Work on the property is under the terms of an option agreement with CanAlaska Uranium to earn a 50% interest in the property by spending $6 million and by issuing 100,000 Mega shares to CanAlaska over three years.
Stewart Taylor, Mega’s President and Qualified Person under NI 43-101, has reviewed the technical information 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, Argentina, Bolivia, Cameroon, Canada, Colombia and Mongolia. Further information on Mega can be found on the company’s website at www.megauranium.com. Mega Uranium’s Australian uranium properties, other than those located in Western Australia, including without limitation the Ben Lomond and Maureen properties, are subject to state policies which presently prohibit the mining of uranium.

For further information, please contact:

Investor Relations
Mega Uranium Ltd.
Richard Patricio
VP Corporate and Legal Affairs
T: (416) 643-7630
info@megauranium.com
www.megauranium.com

NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain information contained in this press release constitutes “forward-looking information”, which is information regarding possible events, conditions or results of operations that is based upon assumptions about future economic conditions and courses of action. All information other than matters of historical fact may be forward-looking information. In some cases, forward-looking information can be identified by the use of words such as “seek”, “expect”, “anticipate”, “budget”, “plan”, “estimate”, “continue”, “forecast”, “intend”, “believe”, “predict”, “potential”, “target”, “may”, “could”, “would”, “might”, “will” and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release includes, but is not limited to, statements about our plans regarding future acquisitions and property development, our expectations regarding the uranium market, global growth and the use of nuclear power, our drill results, commodity prices and core intersection lengths, in that they constitute estimates, based on certain assumptions of mineralization that may be encountered if a deposit were to be mined.

By its nature, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information. Some of the risks and other factors that could cause actual results to differ materially from those expressed in the forward-looking information contained in this release include, but are not limited to: risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations; results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined; mining and development risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development; the potential for delays in exploration or development activities or the completion of feasibility studies; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; risks related to commodity price and foreign exchange rate fluctuations; the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates; risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities; risks related to environmental regulation and liability; political and regulatory risks associated with mining and exploration; and other risks and uncertainties related to the Company’s prospects, properties and business strategy.

Although we have attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking information, readers are cautioned that this list is not exhaustive and there may be other factors that we have not identified. Readers are cautioned not to place undue reliance on forward-looking information contained in this release. Forward-looking information is based upon our beliefs, estimates and opinions as at the date of this release, which we believe are reasonable, but no assurance can be given that these will prove to be correct. Furthermore, we undertake no obligation to update or revise forward-looking information if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

All forward-looking information contained in this release is expressly qualified by this cautionary note.

NOTE REGARDING DISCLOSURE FOR MINERAL PROJECTS


This press release contains disclosure regarding our mineral resources. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Mineral resources may never be converted into reserves. Furthermore, inferred resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Further exploration will be required to upgrade the inferred resources to a higher resource category.