2009 News Releases
Mega Uranium To Sell 35% of Lake Maitland Resource for US$49 Million to Japan Australia Uranium Resources Development Co. Ltd. And ITOCHU Corporation
February 27, 2009
Toronto, Canada, February 27, 2009 – Mega Uranium Ltd. (MGA-TSX) ("Mega Uranium") is pleased to announce a significant milestone for the company welcoming JAURD (the Japan Australia Uranium Resources Development Co. Ltd.) and ITOCHU Corporation (ITOCHU) as its proposed 35% joint venture partners to advance the development of its Lake Maitland Project. Lake Maitland, located in the Eastern Goldfields area of Western Australia, contains a national instrument 43-101 compliant Inferred Resource of 23.7 million pounds U3O8.
JAURD is a Japanese company mandated to acquire uranium resources in Australia on behalf of its shareholders, being three Japanese utilities -- The Kansai Electric Power Company, Incorporated (50%), Kyushu Electric Power Company, Incorporated (25%) and Shikoku Electric Power Company, Incorporation (15%) -- and ITOCHU Corporation (10%), the world’s second largest uranium trading house.
Stewart Taylor, President of Mega Uranium, commented, "After many months of negotiations, we have reached a favourable deal and are pleased to welcome our Japanese partners to help us advance the Lake Maitland Project to production. JAURD’s expertise in the uranium industry and their specific experience of the Australian uranium market make them an ideal partner for us in this project. Their shareholders, Kansai, Kyushu and Shikoku, will have access to uranium produced at Lake Maitland for their own use and ITOCHU will be able to participate in additional uranium off-take arrangements from the project".
Farm-In and Joint Venture Agreement
Mega Uranium, JAURD and ITOCHU have entered into a non-binding memorandum of understanding in respect of the proposed farm-in and joint venture, which provides for aggregate payments of US$49 million by JAURD and ITOCHU to Mega Uranium in order to earn their aggregate 35% interest in the Lake Maitland Project.
Mega Uranium, JAURD and ITOCHU will enter into a definitive farm-in and joint venture agreement which initially provides that JAURD and ITOCHU will make payments to Mega Uranium for feasibility studies at Lake Maitland Project in order to earn 35% interest in the Project, with further payments in due course, subject to favorable results in feasibility studies, including those for the alkaline leaching process.
Entering into a definitive agreement farm-in and joint venture agreement by the parties is subject to a number of conditions, including satisfactory completion by JAURD and ITOCHU of their due diligence, approvals of the transaction by the boards of directors of Mega Uranium, JAURD and ITOCHU, approvals required under the Foreign Acquisitions and Takeovers Act 1975 and related Australian regulatory approvals.
Chairman and CEO of Mega Uranium, Sheldon Inwentash, stated, "I am very pleased with the progress made by Peter McNally, our Vice President, Project Development, and his team at Lake Maitland in the past few years. We completed early prefeasibility studies and advanced metallurgical work ahead of the Western Australian government’s positive stance on uranium mining, which positioned Mega to be at the forefront of uranium activity in the State and allowed us to demonstrate the viability and robustness of this project to JAURD and ITOCHU.
Mega Uranium is well financed and, together with JAURD and ITOCHU, can meet the capital expenditure requirements for the Project as set out in the recently completed and announced Lake Maitland scoping study (see press release dated October 21, 2008).
More Information about JAURD
JAURD’s three utility partners have an installed nuclear capacity of 17,048 megawatts from 6 nuclear power plants, Kansai 9,768 MW from 3 plants, Kyushu, 5,258 MW from 2 plants and Shikoku, 2,022 MW from 1 plant.
More Information about ITOCHU
ITOCHU Corporation, founded in 1858, employs 40,000 people, has 152 offices in 90 countries, and owns 651 subsidiaries and associated companies across many industries worldwide. In trading, its core business, ITOCHU deals in over 30,000 different products, commodities and types of equipment, including uranium trading worldwide.
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.
For further information, please contact:
Mega Uranium Ltd.
VP Corporate and Legal Affairs
T: (416) 643-7630
Cautionary Statement 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.
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: the possibility that the necessary board and regulatory approvals will not be obtained in a timely manner or at all, and that other conditions to completion of the transaction will not be satisfied; and risks related to the inherent uncertainty of mineral exploration and development activities generally, including political and regulatory risks.
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.
Mega Uranium’s Ben Lomond and Maureen uranium resources are subject to a Queensland State Government policy that presently prohibits the mining of uranium.
NI 43-101 Cautionary Statement
Mineral resources that are not mineral reserves do not have demonstrated economic viability.