Mega Uranium gets mining lease for Lake Maitland

Vancouver – Mega Uranium (MGA-T) took a major step toward development of its Lake Maitland uranium deposit this week when the state government of Western Australia granted the company a mining lease for the project. It is the first mining lease granted by the government since it repealed the ban on uranium mining in the state in late 2008.

With the lease now in place, Mega Uranium is increasing its development and testwork activities on the site, which include trenching, bulk sampling for metallurgical studies, and water studies. The company will incorporate the results of this work into a feasibility study scheduled for completion by the middle of 2010. The work will also inform the environmental review and management program, which Mega Uranium plans to submit in a year’s time.

Lake Maitland is a calcrete-style deposit in the Eastern Goldfields of central Western Australia. The deposit currently hosts 28.7 million indicated tonnes grading 0.0376% U₃O₈ and 3.6 million inferred tonnes averaging 0.0274% U₃O₈, for a combined total of 26 million lbs. uranium oxide. The deposit will be conducive to low cost, open pit mining as it occurs as a single, coherent layer that is one to three metres thick and sits just a few metres from surface. In addition, the overburden and ore are both soft and so blasting will not be required. Metallurgical testwork to date indicates uranium recoveries of greater than 90% using atmospheric alkaline leaching.

In June Mega Uranium finalized a deal with two Japanese companies – the Japan Australia Uranium Resources Development Company and ITOCHU Corporation – giving them the right to acquire a 35% interest in Lake Maitland by making staged payments totalling US$49 million.

And on the same day it announced news of the mining lease Mega Uranium announced a $50-million brokered private placement. The company is issuing 58.8 million units at 85¢ a piece, with each unit composed of a share and half a warrant exercisable at $1.25 for five years. The warrants are subject to early expiry if Mega Uranium’s share price exceeds $2.50 for a certain period.

Mega Uranium’s share price was left unchanged on news of the mining lease and financing, closing at 85¢. The company has a 52-week trading range of 39¢ to $2.28 and has 187 million shares outstanding.