Strategic Metals Ltd.

Strategic Metals Ltd.

October 31, 2006 12:26 ET

Strategic Metals Signs Support Agreement With Mega Uranium

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 31, 2006) - Robert Carne, President is pleased to announce that Strategic Metals Ltd. (TSX VENTURE:SMD) has agreed to vote its 5,650,000 shares in Twenty-Seven Capital Corp. (TSX VENTURE:TSC) in favour of the proposed acquisition of Twenty-Seven by Mega Uranium Ltd. (TSX:MGA).

"The acquisition of Twenty-Seven by Mega unlocks significant value for Strategic shareholders and it is clearly a validation of the spin-off of our uranium assets in 2004," says Strategic's President, Robert Carne. "Our generative business plan is working successfully and is adding value to the bottom line, while giving our shareholders an opportunity to participate in a wide variety of exploration projects."

Under the proposed acquisition of Twenty-Seven by Mega, shareholders of Twenty-Seven will receive one common share of Mega and one-half of one Mega common share purchase warrant for each three Twenty-Seven common shares held. Each whole Mega common share purchase warrant will entitle the holder to acquire one Mega common share for a purchase price of $6.00 per share for a period of five years from the date of issuance.

Based on the closing price of the shares of Mega on October 30, 2006, the proposed transaction values the shares of Twenty-Seven at $1.60 each, without attributing any value to the Mega warrants, representing a market value to Strategic of $9.04 million. The Mega warrants will also give Strategic additional leverage to a growing, global uranium exploration company.

Strategic signed a support agreement with Mega dated October 30, 2006, whereby Strategic, which currently holds approximately 33% of the outstanding common shares of Twenty-Seven, has agreed to vote its shares in favour of the proposed transaction.

It is anticipated that the proposed transaction will proceed by way of a three-cornered amalgamation, whereby a wholly-owned subsidiary of Mega will enter into an amalgamation agreement with Twenty-Seven. The common shares of Twenty-Seven will be de-listed from the TSX Venture Exchange on closing of the transaction. The outstanding options of Twenty-Seven will be cancelled and outstanding warrants of Twenty-Seven will be adjusted in accordance with their dilution terms. As of October 30, 2006, Twenty-Seven had 20,296,122 fully diluted common shares outstanding.

The transaction is subject to a number of conditions including, but not limited to, completion of due diligence, Twenty-Seven receiving the requisite shareholder approval, as well as regulatory approvals. There can be no assurance that the transaction will be completed as proposed or at all. It is intended that a meeting of the shareholders of Twenty-Seven will be held as soon as possible to approve the transaction.

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 Mega Uranium's Australian uranium properties, including without limitation, the Ben Lomond and Maureen properties, are subject to state policies which presently prohibit the mining of uranium in Australia.


Robert C. Carne, President


The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy of this news release.

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