Areva-UEX JV cuts more high-grade uranium at Shea Creek

Vancouver — The final two holes of the 2006 winter drill program at the Shea Creek joint venture in the Athabasca basin of northern Saskatchewan have returned further high-grade uranium values for Areva Resources Canada and UEX (UEX-T, UEXCF-O).

New pilot hole SHE-118 at the Kianna deposit intersected 8.6 metres (from 703.5 metres depth) averaging 5.62% U3O8, including 15.07% U3O8 over 1 metre right above and at the unconformity contact. The intercept extends the strike length of the high-grade Kianna mineralization by 30 metres to the southeast. A series of directional drill holes will be launched from the pilot hole to test for further extensions of the mineralization.

Another drill hole, SHE-115-7, also returned uranium mineralization in a 4.1-metre intercept grading 0.94% U3O8 associated with the unconformity, plus additional mineralized intervals deeper in the basement complex.

Drilling at the Kianna deposit over the past three years has identified three types of uranium mineralization:

* perched sandstone-hosted mineralization in lenses or zones, typically tens of metres above the unconformity contact;

* unconformity-type mineralization at or near the contact of the sandstones with the basement rock; and

* basement-hosted mineralization found up to 200 metres below the unconformity contact.

Mineralization at Kianna has been traced by drilling over 200 metres of strike and across 100 metres of width, remaining open in all directions.

The program uses a navigational drilling system (Navi-drilling), allowing a number of directional cuts from an initial pilot hole. The technology uses a steerable drill bit allowing several target intersections, or unconformity impacts, with cost savings and increased accuracy.

In early 2004, UEX entered an agreement with Areva (ARVCF-O) subsidiary, Areva Resources Canada (formerly Cogema Resources), to earn a 49% interest in 10 western Athabasca basin uranium projects, including Shea Creek. UEX is funding $30 million in exploration over 11 years and recently reached the mid-point (24.5%) in its earn-in. The remaining 24.5% can be acquired for outstanding spending of about $15 million. Areva retains operatorship on the projects.

UEX was formed by Pioneer Metals (PSM-T, PNMTF-O) and Cameco (CCO-T, CCJ-N) in 2002 to explore uranium deposits in the Athabasca basin. Pioneer transferred its uranium portfolio to UEX for 46.5 million shares, which were subsequently redistributed to shareholders. Cameco transferred its advanced-stage Hidden Bay project in exchange for 31 million shares, making it the largest stakeholder in the company, currently owning about 21.7%.

Shares of UEX rallied about 10% to close at around $3.68 following the release of the drill results, giving the uranium explorer a $664-million market capitalization based on its 180.4 million shares outstanding. The stock has a 52-week trading range of $2.62-$5.46.