Uranium Power Corp.

Uranium Power Corp.

January 10, 2006 09:30 ET

Uranium Power Corp. Provides an Update on 2005 Operations and Plans for 2006

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 10, 2006) - Uranium Power Corp. ("Uranium Power") (TSX VENTURE:UPC) is pleased to provide this update on progress made during 2005 on its joint venture properties with US Energy Corp (NASDAQ: (Small Cap) "USEG") and to announce plans for 2006. All the joint venture projects between UPC and USE are 50/50 JV's, with UPC funding the first $500,000 of acquisition and exploration expenditures.

Sheep Mountain, Fremont County, Wyoming

On the Sheep Mountain project in Fremont County, WY, an 18-hole drill program was completed for 12,042 feet that successfully extended mineralized horizons located by drilling in the 1970's by a previous operator. That operator was Western Nuclear and the work was undertaken during the years 1956-1978. Details of the history of prior exploration can be extracted from a report prepared on the Sheep Mountain property by Stewart Wallis of Roscoe Postle and Associates Inc. dated January 10, 2005 filed by the Company on www.sedar.com under the Company's profile.

The main target zone for the drill program was an under explored roll front system, which has been named the "58 Sand" and is located approximately 1/2 mile north of the main Sheep 1 and 2 mines. This system dips to the south, towards the Sheep mines, and forms a stratigraphically deeper horizon than the defined mineralization at the Sheep mines.

The newly drilled-out 58 Sand may add to the historic uranium resources previously identified by the drilling of approximately 1250 holes on the property by previous operators. In addition the 2005 drilling has confirmed the presence of a potential open pit resource at the north end of the property.

Chris Healey, P. Geo., Project Manager said, "We are very pleased that we have fully met the objectives of the program, to map out the deep 58 Sand, as well as enhancing the potential for an shallow open pit operation." Rahoul Sharan, President of Uranium Power added, "With the price of uranium continuing to increase, and currently at $36.25USD per pound, I am pleased that we are making such good progress towards bringing this historical producer back into operation."

As reported in the Technical Report by C. Stewart Wallis P. Geo. dated January 10, 2005 and filed on Sedar, Watts Griffis & McOuat (1998) reported Inferred Resources of 1.66 million tons grading 0.258% U3O8 containing 8.6 million pounds of U3O8 using a 0.15% cutoff at Sheep Mountain. These resources were prepared before implementation of National Instrument 43-101. Recent independent verification of the data has not been performed and USEG/UPC have not completed sufficient exploration work to verify the historical estimate. The historical resources were prepared to industry standards at the time and are considered relevant today. USEG/UPC are not treating the historical estimates as NI 43-101 defined resources verified by a qualified person and they should not be relied upon.

The mine remains fully permitted, and can be brought back into production in a relatively short time frame.

An NI 43-101 compliant resource study is planned for completion in the second quarter of 2006. Digitizing of the old drill data to be used in the estimate is about 50% complete. USEG, the project operator, has recently purchased the Gemcom mining software package which will greatly enhance cataloging and analyzing historic data from the previous owner/operator of the Sheep Mountain property.

Breccia Pipes, Mohave County, Arizona

In Arizona the partially completed Phase 1 stratigraphic drill program located several possible collapse features that may be breccia pipes. This drill program was halted for the Christmas holidays and is scheduled to restart January 23, 2006.

The Arizona Strip was the site of major uranium production in the early 1980's. Uranium-bearing breccia pipes were first located in the Hack Canyon area of Mohave County. The mineralization was of a much higher grade than other uranium deposits located in surrounding areas of the Colorado Plateau. This mineralization has been mined at a relatively low cost per pound by conventional underground methods. Historic mining in the Arizona Strip has produced average uranium contents of up to 0.80% U3O8. The total production from individual mines in the area has ranged from about 800,000 lbs to 4,400,000 lbs U3O8.

The first phase stratigraphic drill program will be completed early in 2006, with drilling commencing on January 23, and an anticipated completion date of no later than February 10. This will be followed by a Phase 2 drill program to provide deep tests of the best targets. This second phase is planned to take place in March.

Burro Canyon, San Miguel County, Colorado

In southwestern Colorado, extensive land acquisitions were made on the Burro Canyon project located in San Miguel County. The target for this property is uranium-vanadium mineralization in the Salt Wash member of the Jurassic Morrison formation. A USGS drill hole of unknown date intersected a reported 5.4 feet with average grades of 0.40% U3O8 and 3.62% V2O5 at a depth of 943 feet, on land immediately adjacent to the JV claims.

A 20-hole, 20,000 feet drill program is scheduled to commence on February 6, 2006 using two drill rigs. Contracts have been awarded to drill contractors from Moab, UT and Grand Junction, CO.

Other Projects

UPC and USE are continuing to evaluate other potential projects, with ongoing work to analyze geological and logistical data. During 2006 we anticipate new acquisitions, as well as a series of aggressive drill programs, along with interpretive work on the above-mentioned projects.

Mr. Sharan added, "With the continuing increases in the market price for uranium we are excited about the opportunities these projects provide for early production and the generation of cash flow."

Uranium Power Corp also announces that Mr. Robert Alexander has resigned as a Director of the Company effective November 3, 2005 to pursue other opportunities.


Rahoul Sharan, President

WARNING: The Company relies on litigation protection for "forward-looking" statements. Actual results could differ materially from those described in the news release as a result of numerous factors, some of which are outside the control of the Company.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration in available.

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

Contact Information

  • Uranium Power Corp.
    Rahoul Sharan
    (604) 689-1810
    (604) 689-1817 (FAX)