UGL Enterprises Ltd.
TSX VENTURE : UGS

UGL Enterprises Ltd.

October 06, 2005 09:00 ET

UGL to Earn Interest in High-Grade Gold-Copper Prospect in Mongolia; Drill Program to Commence Immediately

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 6, 2005) - UGL Enterprise Ltd. (TSX VENTURE:UGS) announces that it has signed a letter of intent with Planet Exploration Ltd. (TSX VENTURE:PXI) which gives UGL Enterprises an option to earn a 60% interest, and a second option to earn an additional 20% interest, in Planet Exploration's 100% owned Argalant property.

Argalant covers 2,090 hectares approximately 900 km due west of Mongolia's capital Ulaanbaatar in the Mongolian province of Zavkhan. From late April to June of 2004 Planet conducted exploration programs on Argalant comprising of geological mapping, grab and soil samples, and geophysics (Induced Polarization and ground magnetics). This program was preceded by a smaller Planet reconnaissance program conducted in 2003 where 54 grab samples were taken. The programs were successful in outlining two important high-grade perpendicular striking prospects on Argalant: the Ovoot and the Gozgor.

The Ovoot Prospect

Ovoot consists of multiple high grade copper/gold prospects consisting of fractures with malachite-azurite staining in andesite, skarnised gabbro and quartz sulphide veins with significant values of copper and gold. Numerous historical pits are present partially tracing the mineralization. Assay results from surface samples on Ovoot have ranged from 0.77 to 11.0 grams gold per ton and 1.81% to 10.32% copper (Planet Press Release February 12, 2004).

The Gozgor Prospect

The Gozgor prospect is located about 1000 metres to the northwest of the Ovoot prospect. The Gozgor prospect consists of several structurally controlled, northeast trending, gold and copper-mineralized quartz veins that have been identified in several outcrops over a strike length of at least 1,800 meters. The quartz veins, locally up to 1.5 meters wide, are observed within a number of granite outcrops that are separated by wide swathes of sandy overburden.

A number of grab samples of sulphide-bearing quartz have been collected from the Gozgor quartz veins and have been analyzed for gold. The results of the grab sampling along a 720 metre section returned values of 5.0 to 191.0 grams gold per ton. (Planet Press Release July, 22 2004) These samples are all grab samples and may not accurately reflect the average grade of the quartz vein system.

Exploration Plans

UGL plans to commence exploration on the Argalant Property before the end of October, 2005. The initial program will be comprised of 8-10 shallow diamond drill holes (Totaling approximately 1200 metres) which will test both the Ovoot and Gozgor Prospects. The program will be the first phase of a larger program that will include additional induced polarization and further diamond drilling.

Mr. Arnold Armstrong, UGL's President and CEO states that: "We are excited to have the opportunity to immediately drill a property of this high caliber inside Mongolia. Argalant fits into our plans to give our shareholders the greatest chance for success in Mongolian uranium, gold and copper exploration."

Agreement Terms

Under the terms of the agreement UGL will immediately pay Planet Exploration US$100,000 and incur an aggregate of US$1,500,000 of exploration expenditures on Argalant within three years. A minimum of US$500,000 shall be spent in the first year with a minimum of US$500,000 to be spent within each of the subsequent two years. UGL has the option to complete the expenditures within a shorter time period if desired. Within a six month period of completing US$1.5 million in expenditures UGL is entitled to at its discretion pay Planet Exploration US$1,000,000 for an additional 20% interest in the property. If UGL does not exercise its second option the two companies will then proceed forward on a 60/40% basis. If UGL does exercise its second option the two companies will proceed forward on an 80/20% basis.

Mr. Ranjeet Sundher is the president and a director of Planet Exploration Inc., as well a director of the Company. The Agreement between the Company and Planet Exploration Inc. was approved by the independent members of the board of both companies. Mr. Sundher disclosed his relationships to both companies and abstained from voting in respect of the transaction.

In other matters, the Company reports that, subject to the approval of the TSX Venture Exchange, it has repriced 500,000 incentive stock options to certain directors, officers and consultants of the Company. The options have an exercise price of $0.35 per share and expire on March 1, 2010. The Company will seek shareholder approval for the repricing of those options held by insiders at the Company's next annual general meeting.

ABOUT UGL

UGL Enterprises Ltd. is a junior resource company trading on the TSX-Venture Exchange under the trading symbol "UGS". UGL has 18 uranium properties and 8 gold and copper exploration projects located throughout Mongolia. UGL has a strategic alliance with Maple Minerals Corp. to jointly develop its uranium assets and with Mine Info Ltd., a leading Mongolian Exploration service company. UGL has a full time office in the Mongolia's capital, Ulaan Baatar.

Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Corporation's periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The companies do not assume the obligation to update any forward-looking statement.


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

Contact Information