Mega Uranium Ltd.
TSX VENTURE : MGA

Mega Uranium Ltd.

August 02, 2006 13:03 ET

Mega Invests in Khan Resources Inc.

TORONTO, ONTARIO--(CCNMatthews - Aug. 2, 2006) - Mega Uranium Ltd. ("Mega") (TSX VENTURE:MGA) announced today that it has acquired 1,667,000 units in Khan Resources Inc. ("Khan") (TSX:KRI) for $2,500,500 pursuant to a private placement with Khan. The private placement was completed concurrent with Khan's initial public offering on the Toronto Stock Exchange, whereby Khan issued 3,067,000 units for total proceeds to Khan of $4,600,500 (excluding Mega's private placement). Each unit consists of one common share and one-half of one Class E share purchase warrant exercisable at a price of $1.90 per share at any time before August 2, 2008. The Common Shares and Class E Warrants issued under the concurrent private placement are subject to a four-month hold period.

Khan is engaged in the acquisition, exploration, and development of uranium properties in Mongolia, where Mega, together with Red Hill Energy Inc. (TSX VENTURE:RH), is presently active in uranium exploration (see Mega's release dated June 19, 2006).

Khan is currently focused on its primary assets - the formerly-mined uranium properties in the Dornod district of Northeast Mongolia. The Company holds a 58% interest in the main partially developed Dornod property which is licensed for mining, and a 100% interest in the additional Dornod property, licensed for exploration. Khan is in a unique position to move forward and develop and mine the Dornod uranium deposit in a relatively short period of time. Concurrently there is the opportunity to significantly expand the 40.1 million lb U3O8 indicated resource by further drilling both on surface and underground.
For more information on Khan, please visit their website at: www.khanresources.com.

Mr. Inwentash, Chairman and CEO of Mega commented, "This investment in Khan follows Mega's strategy of acquiring quality international uranium assets, through direct and indirect investments. Khan's uranium property is the type of quality resource we look for, and is in a country we are already familiar with. We look forward to Khan successfully advancing the Dornod deposit".

Mega Uranium Ltd. is a Toronto-based mineral resources company with a focus on uranium properties in Australia, Argentina, Mongolia, Bolivia and Canada. Further information on Mega can be found on the company's website at www.megauranium.com.

This news release contains forward-looking statements within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and other factors that may cause Mega's results to differ materially from expectations. These include risks relating to market fluctuations, property performance and other risks. These forward-looking statements speak only as of the date hereof. Mega Uranium disclaims any intent or obligation to update these forward-looking statements and cautions investors from placing undue reliance on forward-looking statements. Mega does have an ongoing obligation to disclose material information as it becomes available.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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