Magnum Uranium estimates eU3O8 resource at Deep Gold

2008-09-18 12:32 ET - News Release

Mr. Craig Lindsay reports

MAGNUM ISSUES NI 43-101 COMPLIANT URANIUM RESOURCE ON THE DEEP GOLD PORTION OF ITS SAN RAFAEL PROJECT, UTAH

Magnum Uranium Corp. has completed, and filed with SEDAR, a National Instrument Policy 43-101 mineral resource technical report for the Deep Gold deposit portion of its San Rafael uranium property, Emery county, Utah. The Deep Gold mineral resource report estimates an indicated mineral resource of 1,536,900 pounds of U3O8 contained in 282,600 tons at an average grade of 0.272 per cent eU3O8, and an additional inferred mineral resource of 78,200 pounds of U3O8 contained in 24,000 tons at an average grade of 0.163 per cent eU3O8. Ownership percentages of the Deep Gold resource are subject to the terms of the joint venture agreement outlined in the NI 43-101 document.

The NI 43-101 table attached provides an indicated and inferred resource estimate of 1,615,100 pounds at an overall average grade of 0.263 per cent eU308. Average grades of historic NI 43-101-non-compliant resource estimates performed by Atlas Minerals in 1984 and 1985 using Pioneer Uravan drilling results from 1979 to 1981, and Atlas follow-up and expansion drilling results from 1984 and 1985, are close to those given in the attached table, generally in the 0.25 per cent to 0.30 per cent range. The reader is cautioned that these historic grade estimates are not qualified under and do not meet current NI 43-101 guidelines, and Magnum is not treating them as such. They are mentioned here for historic information and reference purposes only.

The Deep Gold NI 43-101 mineral resource technical report was prepared by Steve R. Sturm, AIPG-certified professional geologist No. 08776, who is a qualified person under NI 43-101. Mr. Sturm's experience spans a period of nearly 30 years, mostly pertaining to uranium and coal exploration, as well as groundwater evaluations. Mr. Sturm is particularly experienced in uranium exploration, having been employed by Cotter Corp. as an exploration and uranium mine geologist, and coal exploration and mine development with BHP, Rio Tinto, Cyprus Minerals and Arch Coal Company, where he served as consulting exploration and mine geologist.

The Deep Gold is one of a number of known uranium deposits contained within Magnum's larger 6,000-acre San Rafael uranium project area that comprises a joint venture with Energy Metals Corp. (a subsidiary of Uranium One Inc.), and in which Magnum has earned an 80-per-cent interest (see press release in Stockwatch dated Feb. 12, 2008). The Deep Gold mineral resource report covers that portion of the deposit as it is known to exist in Section 23, T21S, R14E, where it occurs as the probable down-dip extension of Atlas Minerals' historic Snow mine. The Snow produced 650,292 pounds of U3O8 from 173,330 tons of material at an average grade of 0.188 per cent U3O8 between 1973 and 1982 (Wilbanks, 1982). The Deep Gold deposit area comprises approximately 5 per cent of Magnum's entire San Rafael landholdings, the western part of which constitutes the core of the historic San Rafael uranium mining district near Green River, Utah.

Methodology and mineral resource estimation

Mineralization at the Deep Gold deposit is typical of peneconcordant, channel-controlled, trend-type mineralization hosted in Salt Wash member sandstone of the Jurassic Morrison formation. The new resource estimate is based on historic exploration drill holes completed by senior mining and/or exploration companies Pioneer Uravan and Atlas Minerals. Historically, it is estimated that approximately 288,000 feet of drilling, comprising all rotary holes, was conducted on the Deep Gold deposit, with 235,788 feet in 247 holes drilled by Pioneer Uravan and 52,295 feet in 52 holes drilled by Atlas Minerals during the late 1970s through the mid-1980s. Magnum owns these exploration drilling data, which include drill-hole gamma logs and drill-hole location maps that report and detail mineralized zones broken out by 0.1-foot intervals. Also in Magnum's possession are numerous historical Atlas Minerals internal company memos, resource estimate reports and resource spreadsheets, and in-house memos detailing underground mining costs and economic scenarios (in 1984 dollars) pertaining to sinking either a shaft to mine the deposit or accessing it through Atlas's nearby Probe mine shaft. Historically, the San Rafael uranium district was mined by conventional underground methods, producing over four million pounds of uranium and 5.4 million pounds of vanadium.

In the mineral resource report, uranium grade is expressed as weight per cent eU3O8, which is defined as a radiometric equivalent calculated from calibrated natural gamma geophysical logs. Radiometric equilibrium was assumed based on the history of the district. For the mineral resource estimates, polygons were constructed around every hole containing mineralization, with a pound per ton value of greater than and equal to 0.2 pound per ton. Polygons were constructed so that their sides were half the distance to the nearest hole. Resulting individual polygons define the area of influence surrounding each hole. For indicated mineral resources, drill spacing between holes is about 100 feet. For inferred resources, the mineralized trend is not fully defined or bracketed by drilling, but it is reasonable, given the transmissivity of the host rock and the amount of drilling performed, that mineralization extends beyond the portion of the last hole defined by assays.

John R. Carden, PhD, PGeo, a qualified person as defined by National Instrument 43-101, is responsible for the technical information contained in this news release.

Hg