Why do Mega want Queensland Uranium so much? GEORGETOWN URANIUM...

Why do Mega want Queensland Uranium so much?

GEORGETOWN URANIUM PROJECT, NORTH QUEENSLAND, AUSTRALIA

Under a November 2005 Agreement with two private Australian companies, Georgetown Mining Ltd. (GML) and O’Rourke Geological Contractors Pty. Ltd. (OGC), Mega acquired 100% of the uranium-molybdenum-fluorite mineralisation contained within GML’s properties in the Georgetown area of Queensland, Australia, including the Maureen uranium-molybdenum-fluorite deposit, which contains a historical resource of 6.5 Mlbs contained U3O8

GML’s properties, located some 340km northwest of the Ben Lomond uranium-molybdenum resource, comprise 15 granted Exploration Permits, 2 granted Mining Leases and 10 Mining Lease Applications, with a total area of 1580 km2. Under the Agreement, Mega acquired rights to 100% of the uranium-molybdenum-fluorite mineralization in the properties through payments to GML and OGC comprising a total of $A1.1 million in cash, 2.1 million Mega shares and a 0.75% royalty on uranium-molybdenum production. GML retains title to the properties and rights to all commodities other than uranium, molybdenum and fluorite, and will remain responsible for meeting the statutory requirements of the titles.

The outcropping Maureen deposit was detected in 1971 in an airborne magnetic-radiometric survey conducted by the Australian company Central Coast Exploration NL. Drill testing commenced in 1972, then in 1974 Getty Mining Pty. Ltd., the Australian mineral exploration arm of Getty Oil, farmed-in to the property. Over a five year period, Getty evaluated the deposit with a detailed drilling programme, culminating in a 1979 resource estimate of 2.38 million tonnes @ 0.12% U3O8 and 0.07% molybdenum, based on a cut-off grade of 0.035% U3O8. The delineated resource occurs from surface to 140m depth and is conducive to open cut extraction at a favourable stripping ratio. Total drilling of the deposit and its immediate surrounds, from 1972 to 1980, comprised 881 percussion holes (total 78550m) and 137 diamond core holes (total 8368m). The Maureen deposit is located along an E-W trending fracture zone, within Upper Devonian/Lower Carboniferous sandstones and shales, straddling their unconformable contact with the underlying Proterozoic basement of metasediments and granitoids. The primary uranium-molybdenum mineralization occurs in the form of both discordant and stratabound zones, and consists predominantly of uraninite and molybdenite, accompanied by abundant fluorite and pyrite.

In the vicinity of Maureen, and elsewhere on the properties, are radiometric anomalies, uranium occurrences and favourable geological settings for uranium, within both the Proterozoic basement and overlying Palaeozoic sediments/volcanics, which were either untested or inadequately examined by previous explorers.

In 2006 Mega will focus initially on confirming and extending the Maureen resource and conducting an airborne magnetic/radiometric survey of the whole ground package to highlight other targets.