International Uranium Corporation
TSX : IUC

International Uranium Corporation

June 06, 2006 09:51 ET

IUC Signs Formal Option Agreement on Labrador Uranium Property: Exploration Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 6, 2006) - International Uranium Corporation (TSX:IUC) ("IUC") is pleased to announce that a formal Option Agreement has now been signed with Consolidated Abaddon Resources Inc. ("Consolidated Abaddon") pertaining to Consolidated Abaddon's Sims Lake mineral claims totalling 4,390 hectares located northwest of Churchill Falls in west Labrador, Canada (please see news release dated February 23, 2006).

IUC has been granted the sole and exclusive right and Initial Option to acquire a 51% interest in the uranium rights to the Sims Lake property over a period of 2 years. As consideration for the grant of the Initial Option, IUC has paid Consolidated Abaddon the sum of Cdn $20,000 and must incur exploration expenditures in the amount of Cdn $225,000 on or before January 2007, and pay the sum of Cdn $20,000 and incur exploration expenditures in the amount of Cdn $225,000 on or before January 2008.

Provided IUC has exercised the Initial Option, IUC shall be entitled to acquire an additional 24% interest in the Sims Lake property to bring its total interest in the property to 75%. As consideration for the grant of the Second Option, IUC shall incur exploration expenditures on the Property of Cdn $1,000,000 on or before January 1, 2010.

The Sims Lake property covers parts of the known Sims geological formation where uranium was discovered near the Sims - Knob Lake Group unconformity in the early 1980's. The Sims formation is a flat lying clastic sequence of late Proterozoic age that overlies deformed sediments of the early Proterozoic Knob Lake Group. The similarity in ages and relationships between these groups of rock makes the setting analogous to many other Proterozoic basins around the world that host 'unconformity-type' uranium deposits, most notably the Athabasca Basin of northern Saskatchewan. The depth to the unconformity in the Sims Lake basin ranges from 0 to 150 metres on the Property

A summer 2006 field exploration program is scheduled to commence approximately July 15, 2006. IUC has committed to undertake a detailed HLEM geophysical survey (28 km) to define and delineate drillable targets located by the 2005 airborne radiometric and electromagnetic survey conducted by Consolidated Abaddon.

This survey will be immediately followed by a four hole 650 metre drill program. Three holes are designed to test conductors intersecting the unconformity. The fourth is designed to test the trace of a previously defined uranium geochemical anomaly in the Knob Lake Group beneath the unconformity. A composite geochemistry survey, sampling outcrop and glacially transported boulders for uranium, trace elements and clay mineralogy will be carried out in conjunction with the geophysical survey and the drill program.

IUC is also pleased to provide an exploration update in Saskatchewan on the Huard - Kirsch Lakes Uranium Project (13,400 hectares) under option from Consolidated Abaddon. IUC is the operator and the project is situated approximately 20 km northwest of Cameco Corporation's high-grade McArthur River Uranium Mine in the Athabasca Basin of northern Saskatchewan.

IUC has established a 65 line - kilometre cut grid on the Huard - Kirsch property as a follow up to an airborne MegaTem survey that was completed by Consolidated Abaddon in 2005. IUC has now completed a seven kilometre time domain moving loop (TEM) survey, and a 21 kilometre Titan 24 magnetotelluric (MT) survey to enhance the airborne geophysical data. IUC is currently awaiting final results and comprehensive reports covering these surveys. IUC has mobilized their summer geological exploration program and will conduct a boulder geochemistry survey over the entire project area in June - July. In addition, because the winter's ground surveys were unable to cover the entire grid a second 268 line kilometre MegaTem survey better oriented to the local strike direction will be conducted to fill in areas lacking ground coverage.

If the results of ground geophysics and the summer program substantiate the 2005 airborne survey, IUC will be prepared to drill the Huard-Kirsch Lakes project next winter.

IUC's Director, Exploration, Paul Ogryzlo, P.Geo., a Qualified Person pursuant to NI 43-101, has reviewed the contents and technical information contained in this news release.

IUC is engaged in uranium exploration and production. It holds significant uranium deposits in Mongolia and uranium and vanadium deposits in the U.S. and a fully permitted 2,000 ton per day uranium/vanadium mill near Blanding, Utah (one of only two operating uranium mills in the U.S.), as well as uranium exploration properties in the Athabasca Region in Canada. The Company also processes and recycles uranium-bearing waste materials as an environmentally superior alternative to direct disposal. In addition, the Company is a significant shareholder in Fortress Minerals Corp., a public company engaged in precious and base metal exploration in Mongolia and Russia.

Statements contained in this news release which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include: risks inherent in exploration activities; volatility and sensitivity to market prices for uranium and vanadium; the impact of the sales volume of uranium and vanadium; competition; reliance on income from processing uranium-bearing waste materials; the impact of change in foreign currency exchange rates and interest rates; imprecision in resource and reserve estimates; environmental and safety risks including increased regulatory burdens; changes to reclamation requirements; unexpected geological or hydrological conditions; political risks arising from operating in certain developing countries; a possible deterioration in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; replacement of production and failure to obtain necessary permits and approvals from government authorities; weather and other natural phenomena; ability to maintain and further improve positive labour relations; operating performance of the facilities; success of planned development projects; and other development and operating risks. Although IUC believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this release. IUC disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

United States investors are advised that while the term resources is recognized by Canadian regulations, SEC does not recognize that term. Investors are cautioned not to assume that all or any part of mineral deposits in this category will ever be converted into reserves.



ON BEHALF OF THE BOARD

Ron F. Hochstein
President & CEO


Contact Information

  • International Uranium Corporation
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)
    www.intluranium.com