Mega samples 0.5 m of 11,700 ppm U3O8 at Condor

2009-02-05 08:14 ET - News Release

Mr. Stewart Taylor reports

MEGA URANIUM LTD.: UPDATE ON EXPLORATION ACTIVITIES IN CHUBUT PROVINCE, ARGENTINA

Mega Uranium Ltd. has provided an overview on its exploration activities in its Patagonia project in Chubut province, Argentina. A map showing the locations of Mega's property interests in the area can be found in Mega's website www.megauranium.com. Mega has an extensive land package of uranium prospective ground in the two areas of Argentina acknowledged by the National Atomic Energy Commission of Argentina (CNEA) as having the country's best uranium discovery potential - the Cretaceous San Jorge Gulf Basin of Chubut Province and the Sierra Pintada Uranium district in Mendoza Province. The two areas contain Argentina's largest known uranium deposits, the 10.3 Mlbs U3O8 Cerro Solo resource in Chubut Province and the 30 Mlbs U3O8 Sierra Pintada resource in Mendoza Province.

Laguna Salada

Work continued on the excavation of shallow trenches to investigate the economic potential of uranium mineralisation within unconsolidated Quaternary pebbly conglomerates. Mineralisation comprises disseminations of carnotite and autunite within the fine-grained sandy matrix of the conglomerates in association with carbonates and minor gypsum.

Mega is assessing the economic viability of this extensive, but low grade, mineralized layer, as it is amenable to very low cost mining and beneficiation based on the following favorable characteristics:

- It occurs on surface or at a shallow depth, generally of less than 0.3 meter.

- It is flat-lying and continuous over an extensive area.

- As mineralisation is confined to the fine-grained matrix of unconsolidated pebbly conglomerates, it is suitable for beneficiation by a simple screening process.

- In general, the Lago Seco conglomerates consist of 45% by weight of barren pebbles and 55% by weight of mineralized matrix. In the Guanaco area, where the conglomerates typically contain a higher proportion of pebbles, they generally comprise 65% of barren pebbles and 35% of mineralized matrix.

Mega's sampling method comprises taking a 100 kilogram sample from each trench, passing it through 1/4 inch screen, then splitting off a seven kilogram sample for analysis(1.).

In the Guanaco sector, 237 trenches and 11 RC holes have been completed to date over a 9 km2 area of the Quaternary terrace. In a 6.8 km2 portion of this area, 127 trenches have delineated uranium mineralisation with an average thickness of 1.3 meters and screened sample grades for the whole thickness in the range 67-930 ppm U3O8, with an overall average of 180 ppm U3O8. Based on these results, Mega estimates that the resource potential of this 6.8 km2 area is 2.5-3 Mlbs U3O8. Based on airborne radiometric data, the mineralized conglomerates occur over a total area of some 30 km2.

In the Lago Seco sector, located four kilometers southwest of Guanaco, 229 trenches and 4 RC holes have been completed to date. Over a 6.1 km2 area, 154 trenches have exposed uranium mineralisation with an average thickness of 0.9 meters and screened grades over the whole thickness in the range 62-432 ppm U3O8, with an overall average of 160 ppm U3O8. Based on these results, Mega estimates that the 6.1 km2 area contains potential for delineating a resource of some 1.5-2 Mlbs U3O8. The mineralisation is open to the south where a 10 km2 area of the Quaternary terrace remains to be investigated by trenches.

In accordance with the NI43-101 guidelines, Mega wishes to state that the resource potential stated above is conceptual in nature, that there has been insufficient exploration to define a mineral resource, and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Cerro Solo East

A program of 11 RC holes (total 1057 meters) was drilled in Mega's tenements east of the CNEA's Cerro Solo uranium resource to investigate the potential for similar mineralisation in the Los Adobes Formation of the Cretaceous Chubut Group within 50-100 meters depth from surface.

The original intention of the program was to test the ground around two vertical holes, four kilometers apart, which intersected uranium mineralisation in Cerro Solo host stratigraphy in 2006 - RCU-03 (2 meters @ 0.11% U3O8 at 87 meters depth) and RCU-09 (1 meter @ 0.21% U3O8 at 56 meters depth). However, due to a delay in obtaining landowner approval for drilling the priority targets, the first nine holes were relocated to investigate the Los Adobes Formation in lower priority targets predominantly adjacent to other major northwest-trending faults. All nine holes failed to intersect significant uranium mineralisation.

When landowner approval was obtained for drilling the priority targets, two holes were drilled, respectively, 400 meters north and 400 meters southeast of RCU-03. Both holes intersected Los Adobes Formation conglomerates with abundant pyrite similar to those intersected in RCU-03, but there was no significant uranium mineralisation. Further drilling was scheduled east of RCU-03 and also around RCU-09, but the drilling program was terminated due to a corporate decision to conserve funds.

Condor

In the Condor tenements, located 18 kilometers west of the Cerro Solo resource, preliminary channel sampling of a 2 km2 portion of a Quaternary terrace has returned encouraging uranium and molybdenum values2 within surficial pebbly conglomerates similar to the Laguna Salada area (Table 1). Of 23 samples taken, 21 returned values in the range 100-11700 ppm U3O8 over a true thickness of 0.45-1.8 meters. Mega now intends to conduct systematic trenching of this 2km2 area with a view to delineating an economically mineable resource. Based on the limited information available to date, Mega estimates that the 2km2 area has potential for some 3-4 Mlbs U3O8. To the west, additional resource potential exists in an adjacent 8km2 area of similar uraniferous Quaternary pebbly conglomerates that are yet to be sampled. In accordance with the NI43-101 guidelines, Mega wishes to state that the potential quantity is conceptual in nature, that there has been insufficient exploration to define a mineral resource, and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

Mirasol

A program of 19 vertical RC holes (total 2036 meters) was drilled within an 80km2 portion of the Mirasol tenements. Initially 14 widely-spaced vertical RC holes were drilled to investigate the uranium potential at two stratigraphic levels of flat-lying Cretaceous sediments, as follows:

- Sandstones with abundant tree trunks, other carbonaceous matter and disseminated pyrite at 35-60 meters depth. In exposures of these sandstones in gullies, rock chip samples had returned values(2.) up to 800 ppm U3O8.

- Deeper conglomerates stratigraphically equivalent to the host sediments of the Cerro Solo uranium resource.

Of the 14 holes, one hole, DMS-05, intersected 3.9 meters @ 380 ppm eU3O8 in sandstones from 38 meters depth(3.). The other holes contained anomalous, but economically insignificant, uranium values. Five additional holes were then drilled around DMS-05 at a 400 meter spacing. Of these, hole DMS-15 intersected 1.8 meters @ 380 ppm eU3O8 and 620 ppm Mo at 35.7 meters depth within the same layer of sandstones, 400 meters east of DMS-05. The mineralisation remains open to the southeast.

Gato-Krouger

Reconnaissance mapping and sampling of the Gato-Krouger tenements, Mega's southernmost ground holdings in Chubut Province, have produced encouraging results in five prospects as follows:

(1) Gato

Mapping delineated stratabound uranium mineralisation in iron oxide-rich sandstones of the Tertiary Salamanca Formation located adjacent to a basic dyke along a one kilometer long portion of a northwest-trending fault. Sampling returned best values2 over 0.5 meter widths of 0.08% U3O8 and 1.9% U3O8. Previous exploration of this prospect by the CNEA included limited shallow drilling which intersected mineralized intervals, 1-3 meters thick, with average grades of 500 to greater than 1000 ppm U3O8.

(2) Krouger

In the Krouger prospect, located five kilometers southeast of Gato along the same northwest-trending structure, mapping delineated stratabound uranium mineralisation in sandstones of the Tertiary Rio Chico Formation adjacent to a diatreme along a 500 meter strike length.

(3) Rio Chico

Sampling of sandstones of the Tertiary Salamanca Formation on the flanks of a basic dyke, 1.5 kilometers southeast of Krouger, returned best values over 0.5 meter widths of 0.2% U3O8 and 0.07% U3O8. A ground radiometric survey indicated that the mineralisation persists over a one kilometer strike length.

(4) Cerro Negro

In the Cerro Negro prospect, located 35 kilometers northeast of Gato, mapping delineated uranium mineralisation in the Tertiary Salamanca Formation adjacent to a basic dyke on a northwest trending fault zone.

Based on these results Mega has increased the ground in the Gato Kruger area in which it holds tenure, or is earning an interest, from one cateo (exploration permit) of 100 km2 to six adjacent cateos covering a total area of 600km2.

Notes

(1.) The screened samples from Guanaco and Lago Seco were assayed at the ALS Chemex laboratory in Mendoza by inductively coupled plasma spectrometry (method ICP-ME-MS61).

(2.) The surface samples from Condor and Gato Krouger and the RC drill samples from Cerro Solo East and Mirasol were assayed at the Mendoza laboratory of Alex Stewart Assayers by inductively coupled plasma spectrometry (method ICP-MA-42).

(3.) Equivalent U3O8 grade as determined by downhole gamma logging using a Mount Sopris 2PGA-1000 probe. Calibration was undertaken at the test pits in Grand Junction, Colorado.

Stewart Taylor, Mega's President and Qualified Person under NI43-101, is responsible for this release and has verified the contents disclosed.

We seek Safe Harbor.