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Mega Uranium Announces Results of Scoping Study of Lake Maitland Uranium Resource, Western Australia

October 21, 2008

Mega Uranium Ltd. (TSX: MGA) (“Mega”) is pleased to report that it has received a positive preliminary economic assessment (first pass scoping study) of its Lake Maitland uranium resource in Western Australia.

The study, conducted by Perth-based consultants, Milestone Engineers and Project Managers (“Milestone”), was based on the National Instrument 43-101 compliant Inferred Resource estimate established by Hellman and Schofield Pty Ltd in 2007 (Table 1), but does not include the results of the drilling programs from December 2007 to July 2008, comprising 532 infill aircore holes and 42 sonic core holes within the delineated resource at a 200 ppm U3O8 cut-off, and 229 aircore holes drilled into a potential southern extension of the resource.

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. Management anticipates that the drilling results, now being compiled and assessed, may increase the resource and upgrade it to the Indicated Resource status. Such results would be the subject of an updated 43-101 technical report.

 Table 1: Lake Maitland 2007 Inferred Resource Estimate(1,2) ----------------------------------------------------------- Cut-off grade Tonnage      Grade  Mlbs     % of      % of (ppm U3O8)        (Mt) (ppm U3O8) U3O8 Resource Contained                                         Tonnage      U3O8 ----------------------------------------------------------- 100              32.7        330  23.7      100       100 ----------------------------------------------------------- 200              16.6        500  18.3       50        78 ----------------------------------------------------------- 500               5.5        860  10.5       17        45 ----------------------------------------------------------- (1) The inferred resource estimate is contained in the technical report  entitled "First Time Disclosure: Mega Uranium Ltd., Mineral Resource for  Lake Maitland Uranium Deposit" dated February 20, 2007, prepared by Hellman  & Schofield Pty Ltd, available at www.sedar.com under Mega's profile. (2) Mineral resources that are not mineral reserves do not have demonstrated  economic viability 

The calcrete-style Lake Maitland deposit, located in the Eastern Goldfields region 108 kilometers southeast of Wiluna, occurs in the form of a single, coherent layer, only 1-2 meters from surface, which is conducive to simple, low cost, open pit mining. Due to the soft nature of the ore and overburden, drilling and blasting will not be required. Metallurgical testwork to date indicates satisfactory uranium recoveries of greater than 90% using atmospheric alkaline leaching.

The Milestone scoping study investigated the project economics of producing 750 tonnes (1.65 million pounds) U3O8 per year from the resource, using cut-off grades of 100, 200 and 500 ppm U3O8, and at uranium prices of $US60, US$75 and US$90 per pound U3O8. The study was based on the following assumptions:

– Leaching recovery rate of 90%.

– Long term Australian dollar exchange rate US$0.80.

– Cost of capital 8%.

– Corporate Tax Rate 30%.

– NPV discount rate 10%.

The results of the three development scenarios are summarized in Table 2. For the preferred development option, based on mining the greater than 200ppm (0.02%) U3O8 resource to produce 1.65Mlbs U3O8 per year, and assuming a sale price of US$75 per pound U3O8, the key results are as follows (costs are reported at a nominal +/- 35% degree of accuracy):

– A capital cost of US$85.1 million.

– An average operating cost of US$16.6 per pound U3O8.

– A Net Present Value (NPV) of US$181.4 million.

– An Investment Rate of Return (InRR) of 43.4%.

Sheldon Inwentash, Mega’s Chairman and CEO, commented “The removal of the long-standing ban on uranium mining in Western Australia and the attractive project economics of Lake Maitland are significant milestones in Mega’s goal to become a uranium producer in the near term. Our project development team is now focused on advancing the project through to production in 2011″.

Over the past two years, there has been substantial progress at Lake Maitland in the installation of infrastructure, including offices, workshops, communications systems, accommodation facilities and environmental monitoring equipment. Most of the long lead time baseline environmental studies are nearing completion, and detailed plans are in place to commence the Environmental Impact Statement and submissions for the required licenses and approvals. Within the next two months, Mega will be seeking advice from the Federal and State governments regarding the requirements of the Integrated Project Approval System.

Consultations are underway with Indigenous Groups with a view to engaging aboriginal people in project development and operations. Discussions have also commenced with potential customers regarding product off-take agreements.

Definitive feasibility studies will now focus on various processing, engineering and infrastructure options with a view to enhancing the project economics. Such studies will include investigating the potential to reduce mining costs through the use of a continuous miner, the possibility of optimizing processing costs through beneficiation of ore prior to leaching and improvements in the leaching recovery, and capital cost savings through the use of existing infrastructure. The studies are being undertaken by the Perth-based consulting groups, Milestone Engineers and Project Managers (project design and costing), Independent Metallurgical Operations Pty Ltd (metallurgy) and Aquaterra Pty Ltd (water supply and environmental aspects).

The studies are being coordinated by Peter McNally, Mega’s VP-Project Development, who has considerable experience and expertise in uranium mining and mine development gained in over 15 years service with Energy Resources of Australia, in senior management roles at Ranger mine and as General Manager of the Jabiluka resource development.

 Table 2: Summary of the Scoping Study results ----------------------------------------------------------------------------                                       Mining the   Mining the   Mining the                                          greater      greater      greater                                         than 100     than 200     than 500                                         ppm U3O8     ppm U3O8     ppm U3O8                                         resource     resource     resource ---------------------------------------------------------------------------- Ore Resource (M tonnes)(1)                  32.7         16.6          5.5 ---------------------------------------------------------------------------- Grade (ppm U3O8)                             330          500          860 ---------------------------------------------------------------------------- Contained U3O8 (Mlbs)                       23.7         18.3         10.5 ---------------------------------------------------------------------------- Throughput (Mt/year)                        2.55         1.67         0.95 ---------------------------------------------------------------------------- Life of Mine (Years)                        12.8         10.0          5.8 ---------------------------------------------------------------------------- Production (Mlbs U3O8 /year)                1.65         1.65         1.65 ---------------------------------------------------------------------------- Total Production (Mlbs U3O8)                21.2         16.5          9.5 ---------------------------------------------------------------------------- Capital Cost (US$ million)                 125.0         85.1         63.5 ---------------------------------------------------------------------------- Operating Cost (US$ per lb U3O8)           21.04        16.61        10.57 ---------------------------------------------------------------------------- NPV at US$60/lb U3O8 (US$ million)         47.41        99.69        85.34 ---------------------------------------------------------------------------- NPV at US$75/lb U3O8 (US$ million)        143.72       181.37       139.57 ---------------------------------------------------------------------------- NPV at US$90/lb U3O8 (US$ million)        239.17       263.05       193.79 ---------------------------------------------------------------------------- InRR at US$60/lb U3O8                       16.8%        30.8%        42.2% ---------------------------------------------------------------------------- InRR at US$75/lb U3O8                       27.8%        43.4%        57.1% ---------------------------------------------------------------------------- InRR at US$90/lb U3O8                       36.8%        54.3%        70.1% ---------------------------------------------------------------------------- (1) Mineral resources that are not mineral reserves do not have demonstrated  economic viability. 

Stewart Taylor, Mega’s President and Qualified Person under NI43-101, is responsible for 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 Ben Lomond and Maureen uranium resources are subject to a Queensland State Government policy that presently prohibits the mining of uranium.

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. Forward-looking information in this press release includes, but is not limited to, statements about Mega’s expectations regarding the economic viability of the Lake Maitland project, drilling results and plans for the project.

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, volatility in the price of uranium, economic and political events affecting uranium supply and demand, changes in the regulatory environment, geological, technical, mining or processing problems, changes in the life-of-mine plan or ultimate pit design, availability and increasing costs of mining inputs and labour, availability of future financing on reasonable terms, and risks related to the inherent uncertainty of mineral exploration and development activities generally.

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.

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

SOURCE: Mega Uranium Ltd.




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