(15-20 min delay)
Mega Uranium Ltd.
211 Yonge Street, Suite 502
Toronto, Ontario, Canada
Ben Lomond, Australia
In January 2005, Mega acquired Uranium Mineral Ventures Inc (“UMVI”), a private company whose principal asset was an option to acquire from Afmeco Mining and Exploration Pty Ltd (“Afmeco”) (an Australian subsidiary of AREVA Ltd) the Ben Lomond uranium-molybdenum property in Queensland, Australia, some 50km west of Townsville. The property contains two adjacent Mining Leases (total 21.6 km2), which were each renewed for 10 years from December 2004. In February 2006, following the transfer of both Mining Leases from Afmeco to UMVI, Mega completed the acquisition of UMVI.
The Ben Lomond deposit comprises an east-west trending, steeply dipping (750) vein system within Carboniferous volcanic rocks immediately underlying an unconformity.
The deposit was discovered in 1975 by the French company Pechiney, then explored and evaluated in detail between 1976 and 1982 by associated companies Total Mining and Minatome. Overall, a total of over 65,000 metres of surface drilling was undertaken on the property in testing and evaluating the Ben Lomond deposit and surrounding prospects. In addition, the deposit was investigated in detail in underground work, comprising an adit, decline, haulageway, drilling at 25 metre centres along strike, and bulk sampling.
The evaluation work culminated in the delineation of an NI 43-101 compliant resource, comprising an Indicated Resource of 1.33 million tonnes @ 0.27% U3O8 (7.9Mlbs U3O8) and an Inferred Resource of 0.6 million tonnes @ 0.21% U3O8 (2.8Mlbs U3O8). The resource also contains a substantial molybdenum credit at an average grade of 0.15% Mo*. On the basis of its relatively high average 0.25% U3O8 grade, and this substantial molybdenum credit, Ben Lomond is one of the highest value per tonne uranium resources outside the Athabasca Basin in Canada.
The deposit has significant upside potential, as it is open to the east over at least a 1.05 km strike length. In this area, limited widely spaced surface drilling has intersected encouraging intervals of uranium mineralisation and rock alteration. A 1982 Feasibility Study conducted by Minatome concluded that 70% of the resource was mineable by open cut at a 5:1 stripping ratio and that the remainder is conducive to extraction by underground workings from the pit.
Following the completion of a Bankable Feasibility Study in 1982, an Environmental Impact Study was accepted by the relevant Federal and State authorities in 1984, but in 1985 the planned mine development was halted by the imposition of the “the Three Uranium Mines Policy” by the then Australian Federal Labour Government.
The deposit occurs at low elevation in remote, sparsely populated hill country at an easily accessible site some 50km west of the major port city of Townsville, and is favourably located with respect to future mine development as it is close to power, water and essential services.
Mega is undertaking prefeasibility studies of Ben Lomond with a view to determining the project economics, the preferred mining and processing options and the key steps in mine development.
* The molybdenum grade was defined in a 1982 internal feasibility study by Minatome Australia Pty Ltd., and as such, should not be relied upon. Mega has not conducted any work at this time to verify the grade or the corresponding historical resource and is not treating the grade or resource as a current estimate for the purpose of NI 43-101. The grade should be viewed as conceptual in nature until such time that further exploration is done and an NI 43-101 compliant molybdenum resource is defined.