Uranium Power Corp.

Uranium Power Corp.

October 18, 2005 09:30 ET

Uranium Power Corp. Updates Sheep Mountain Drilling; Commissions Pre-Feasibility Study and Reserve Study

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 18, 2005) - Uranium Power Corp. ("Uranium Power") (TSX VENTURE:UPC) and U.S. Energy Corp (NASDAQ:USEG) is pleased to announce highly encouraging results from the recent drilling program on its 50:50 joint venture on the Sheep Mountain project in Fremont County, Wyoming. As a result the joint venture intends to move immediately to initiate a pre-feasibility study on a potential open pit, heap leach operation, as well as a full Reserve study on Sheep Mountain.

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 $33 per pound, I am pleased that we are making such good progress towards bringing this historical producer back into operation."

To date 15 holes have been completed for 8,862 feet. The main target zone is 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.

Earlier drilling by a previous operator had resulted in the following intersections in this sand:

S16-58 8.0 feet @ 0.81% eU3O8
S16-59 10.0 feet @ 0.31% eU3O8
S16-233 13.0 feet @ 1.49% eU3O8
S16-270 9.0 feet @ 0.65% eU3O8

Recent drilling has successfully outlined continuity of mineralization within the front over a strike length of greater than one mile, with grades and thicknesses consistent with those observed at the Sheep mines. Intersections in the 58 Sand from the current drill program include the following:

SM16-1006 6.5 feet @ 0.21% eU3O8
SM16-1010 7.5 feet @ 0.13% eU3O8

A second objective of the drill campaign was to confirm the extent and grades of shallow mineralization in what is known as the Congo Pit area. This is the up dip extension of the main Sheep Mountain mineralization, where the dip and the topography combine to bring the zone close to surface. Intersections obtained in this zone during the current program include:

SM16-1004 5.5 feet @ 0.22% eU3O8
SM16-1005 11.5 feet @ 0.08% eU3O8
SM16-1009 6.5 feet @ 0.12% eU3O8
SM16-1015 2.5 feet @ 0.23% eU3O8
SM16-1023 3.0 feet @ 8.04% eU3O8
SM16-1025 19.0 feet @ 0.05% eU3O8
SM16-1016 8.5 feet @ 0.50% eU3O8
SM16-1017 3.5 feet @ 0.18% eU3O8

These grades and thicknesses confirm, and indeed improve, the average grade of the previously drilled shallow mineralization, which earlier operators estimated to be 0.12% U3O8.

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.

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 USE/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. USE/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.

With these highly encouraging results, the Joint Venture now plans to move immediately to the generation of a NI 43-101 compliant Resource/Reserve Study for the Sheep Mountain project. This will involve the digitization of the 1250 drill holes for the project and the hiring of an engineering firm to complete the study. In addition, it is planned to conduct a pre-feasibility on a possible open pit - heap leach operation in the Congo Pit area, again with the use of an independent engineering firm.

Stewart Wallis P. Geo. of Roscoe Postle Associates Inc. is the qualified person for this project under National Instrument 43-101 for purposes of Uranium Power's disclosures under Canadian securities laws.


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.

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Contact Information

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