Magnum Uranium Corp.

Magnum Uranium Corp.

December 05, 2006 12:56 ET

Magnum Finalizes JV Agreement with Energy Metals for Utah and Wyoming Uranium Properties

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 5, 2006) - Magnum Uranium Corp. ("Magnum") (TSX VENTURE:MM) is pleased to announce that it has completed a formal joint venture agreement (the "JV") with Energy Metals Corporation ("EMC") on two uranium properties, the 6,000 acre San Raphael property located in the San Raphael District of Emery County, Utah and the Wild Buck property located in Converse County, Wyoming. Finalization of the agreement comes after signing a Letter of Intent as reported in a press release by Magnum dated August 22, 2006 and the completion of a 2 month due diligence review of the available data and significant on-site assessments. Present resources for the two properties, as determined during due diligence, total 3.05 million pounds of uranium. Numerous areas hosting additional potential resources, as identified by historic close-spaced drilling, are present at San Raphael and Magnum will systematically confirm these in the near future.

San Raphael

The San Raphael District, located on the east flank of the San Raphael Swell, has been explored and sporadically mined for uranium and vanadium since the 1880's, but was explored extensively during the uranium booms of the 1950's and the late 1970's to early 1980's. Historically, the San Raphael District has produced more than 3.1 million pounds of U3O8 and 5.4 million pounds of V2O5 from 750,000 tons of ore. On the San Raphael property itself, internal reports and memoranda from Union Carbide indicate that Conoco drilled more than 165 holes and defined a historical resource on section 35 and State section 36 of the property (the "Down Yonder" deposit). A 1974 internal company report by Union Carbide states that 2.073 million pounds grading 0.16% U3O8 are present. Although considered relevant, the reader is cautioned that this resource estimate does not comply with the guidelines of National Instrument 43-101 and Magnum is not treating it as such. Uranium and the corresponding vanadium mineralization associated with these deposits commonly have a U: V ratio of 1:2. Deposits in the San Raphael District typically occur within the stratigraphic sequence of the upper Salt Wash member of the Jurassic Morrison Formation.

Furthermore, Magnum has in its possession a large database pertaining to the historic drilling which occurred on the claims subject to the joint venture agreement. To date, Magnum has relocated and surveyed over 1,100 historic drill holes north of Conoco's Down Yonder deposit. Many of the holes were drilled in discrete clusters on a tight-spaced grid, suggesting multiple deposits were identified.

Magnum has a comprehensive data package, and has used this to develop an in-house surface polygonal resource estimate based on only one of these densely drilled clusters (known as the "4484" deposit). Based on 87 holes, a polygonal estimate of 633,000 pounds uranium exist at a grade of 0.074% U3O8. The deposit has a higher grade core of 287,000 pounds uranium at a grade of 0.125% U3O8 that is open in several directions. Although considered relevant, the reader is cautioned that this resource estimate does not comply with the guidelines of National Instrument 43-101 and Magnum is not treating it as such.

Finally, the extensive database existing on the JV area is currently being evaluated by Magnum geologists in order to further delineate and perform polygonal resource estimates on additional resources that are indicated from historical drilling performed by Anaconda. Resource estimates will be forthcoming as Magnum systematically works through the information.

Wild Buck

The second property included in the JV agreement, the Wild Buck, is located in the southern Powder River Basin, just 6 miles northwest of Cameco's world-class Smith Ranch uranium deposit and permit area. The property hosts classic Wyoming-type roll front uranium mineralization at depths of 150 to 200 feet in the Paleocene Fort Union Formation directly beneath the School Coal Seam. This setting and stratigraphy are similar to that hosting the mineralization at Smith Ranch.

During the due diligence performed by Magnum, a preliminary polygonal resource calculation was performed on 200 holes drilled by Denison Mines and Nuclear Exploration and Development Company during the late 1960's and early 1970's. A surface polygonal resource estimate performed by Magnum indicates approximately 350,000 pounds of U3O8 is present within the main resource area at a grade of 0.070% U3O8. Although considered relevant, the reader is cautioned that this resource estimate does not comply with the guidelines of National Instrument 43-101 and Magnum is not treating it as such.

The geometry of the deposit appears to be a classic roll front-type system. Some of the better intervals from holes drilled include: 24 feet grading 0.13% U3O8, 19 feet grading 0.17% U3O8, 12 feet grading 0.21% U3O8 and 8.5 feet grading 0.30% U3O8. The drilling to date is relatively shallow (holes from 250 to 270 feet deep) and the deposit is open in several directions. Additionally, excellent potential remains for the property to host multiple, stacked horizons and roll front systems beneath the known mineralization, similar to those found at nearby Smith Ranch. Drilling will be required to check for stacked deposits below the currently defined mineralization, which occurs at depths of 150 to 200 feet. Typically, uranium deposits hosted in the Fort Union Formation of the Powder River Basin are amenable to extraction by In-Situ Leaching ("ISL").

Under the terms of the JV agreement, Magnum can earn a 65% interest in the properties by fulfilling the requirements of spending $1.0 million in work on the two properties and issuing 600,000 shares of Magnum common stock staged over a 5 year period. Magnum's first year obligation is $200,000 in work and the issuance of 150,000 shares of Magnum common stock. Magnum has the right to increase its interest in the properties to 80% by issuing an additional 250,000 shares of Magnum common stock to EMC after the initial earn-in.

The Company

Magnum is a Vancouver-based minerals exploration company focused on the acquisition and development of uranium assets in North America. Currently, Magnum's primary property holdings are mainly located in the Western United States, specifically Wyoming, Utah, Idaho, and New Mexico, as well as Canada's Athabasca Basin.

Dr. John Carden, Ph.D., P.Geo., a Director and Consulting Geologist for Magnum Uranium Corp., and a Qualified Person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.


Craig T. Lindsay, President & CEO

Contact Information