The Geology and Uranium Mineralization of the Laguna Salada Project, Chubut Province, and exploration strategies for exploration of earlier-stage properties in Argentina
Richard M. Spencer P. Geo, PhD
Richard Cleath MSc
March 23, 2010 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Table of Contents 1 Summary ...... 9 1.1 Laguna Salada Project ...... 9 1.2 Cerro Solo East Project ...... 10 1.3 Other Properties ...... 11 2 Introduction ...... 12 3 Reliance on Other Experts ...... 12 4 Property Description and Location...... 13 4.1 Area of the Principal Properties ...... 13 4.2 Property Application Process ...... 13 4.2.1 Exploration Concessions (Cateos) ...... 14 4.2.2 Mining Concessions (MDs) ...... 14 4.3 Maintenance of a Concession ...... 14 4.3.1 Exploration Concessions (Cateos) ...... 14 4.3.2 Mining Concessions (MDs) ...... 14 4.4 Mineral Concessions Comprising Mega’s Principal Projects in Argentina ...... 15 4.4.1 Laguna Salada Project ...... 15 4.4.2 Cerro Solo East Project ...... 15 4.5 Location of Mineralized Zones Relative to the Properties ...... 18 4.6 Royalties and Other Encumbrances ...... 18 4.7 Other Required Permits & Environmental Liabilities ...... 20 4.8 Provincial Restrictions on Mining and Processing in Argentina...... 21 4.8.1 Chubut Province ...... 21 4.8.2 Mendoza Province ...... 21 4.8.3 Santa Cruz Province ...... 22 4.8.4 Salta Province ...... 22 4.8.5 Catamarca Province ...... 22 4.8.6 San Luis Province ...... 23 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 23 5.1 Topography, Elevation and Vegetation ...... 23 5.2 Access ...... 24 5.3 Climate ...... 25 6 History ...... 25 6.1 Laguna Salada Project ...... 25 6.2 Cerro Solo East Project ...... 25 7 Geological Setting ...... 26 7.1 Laguna Salada Project ...... 26 7.1.1 Regional Geology ...... 26 7.1.2 Geology of the Laguna Salada Project ...... 28 7.2 Cerro Solo East Project ...... 29 7.2.1 Regional Geology ...... 29 7.2.2 Geology of the Cerro Solo East Project Area ...... 29 8 Deposit Types ...... 30 8.1 Surficial Uranium Deposits ...... 30 8.2 Sandstone-Hosted Uranium Deposits ...... 31 9 Mineralization ...... 32 9.1 Laguna Salada Project ...... 32
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9.1.1 Guanaco Area ...... 32 9.1.2 Lago Seco Area ...... 33 9.1.3 Buried Lake Area ...... 34 9.2 Cerro Solo East Project ...... 34 10 Exploration ...... 34 10.1 Responsibility for Exploration ...... 34 10.2 Laguna Salada Project ...... 34 10.2.1 Guanaco Area ...... 35 10.2.2 Lago Seco Area ...... 36 10.2.3 Buried Lake Area ...... 43 10.3 Cerro Solo East Project ...... 44 11 Drilling ...... 44 11.1 Laguna Salada Project ...... 44 11.2 Cerro Solo East Project ...... 44 12 Sampling Method and Approach ...... 48 12.1 Laguna Salada Project ...... 48 12.1.1 Area Sampled ...... 48 12.1.2 Nature of the Mineralization ...... 48 12.1.3 Sampling Procedure ...... 51 12.1.4 Accuracy of Sampling and Potential for Sample Bias ...... 53 12.1.5 Use of Reference Materials and Field Duplicate Samples ...... 53 12.1.6 Density Measurements ...... 53 12.2 Cerro Solo East Project ...... 53 12.2.1 Nature of the Mineralization ...... 53 12.2.2 Sampling Procedure ...... 54 12.2.3 Accuracy of Sampling and Potential Bias ...... 54 13 Sample Preparation, Analysis and Security ...... 55 13.1 Laguna Salada Project ...... 55 13.1.1 Responsibility for Sampling and Sample Security ...... 55 13.1.2 Sample Preparation and Assay ...... 55 13.1.3 Quality Assurance and Quality Control (“QAQC”) ...... 55 13.1.4 Adequacy of Sampling, Security and Analytical Procedures ...... 59 13.2 Cerro Solo East Project ...... 59 13.2.1 Responsibility for Sampling and Sample Security ...... 59 13.2.2 Sample Preparation and Assay ...... 59 13.2.3 Quality Assurance and Quality Control ...... 59 13.3 Certification of Laboratories ...... 59 14 Data Verification ...... 60 14.1 Laguna Salada Project ...... 60 14.2 Cerro Solo East Project ...... 60 15 Adjacent Properties ...... 61 15.1 Laguna Salada Project ...... 61 15.2 Cerro Solo East Project ...... 61 16 Mineral Processing and Metallurgical Testing ...... 62 17 Mineral Resources and Mineral Reserve Estimates ...... 62 18 Other Relevant Data and Information ...... 62 18.1 Introduction ...... 62 18.2 Projects in Chubut Province ...... 62 18.2.1 Condor Project ...... 62 18.2.2 Gato-Krugger Project ...... 63 18.2.3 Sierra Chata Project ...... 63
3 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
18.2.4 Mirasol Project ...... 63 18.2.5 Sierra Cuadrada Project ...... 64 18.3 Mendoza Province ...... 66 18.4 Salta and Catamarca Provinces ...... 67 18.5 San Luis Province ...... 67 18.5.1 Concaran Concessions ...... 67 18.5.2 San Martin Concessions ...... 67 18.6 Santa Cruz Province ...... 67 19 Interpretation and Conclusions ...... 69 19.1 Current Project Ranking for Funding ...... 69 19.2 Laguna Salada Project ...... 69 19.3 Cerro Solo East Project ...... 70 19.4 Condor Project ...... 71 19.5 Gato-Krugger Project ...... 71 19.6 Reconnaissance of Other Properties ...... 71 20 Recommendations ...... 72 20.1 Laguna Salada Project ...... 72 20.2 Cerro Solo East ...... 72 20.3 Condor Project ...... 73 20.4 Gato Krugger Project ...... 74 20.5 Reconnaissance Exploration ...... 74 20.6 Budget Summary ...... 76 21 References ...... 77 22 Date and Signature Page ...... 78 23 Appendices ...... 79 23.1 Appendix 1 ...... 79 23.1.1 Appendix 1A: Details of Mega’s mineral concessions in Chubut Province, Argentina...... 79 23.1.2 Appendix 1B: Details of Mega’s mineral concessions in the Catamarca, Mendoza, Salta, San Luis and Santa Cruz provinces, Argentina...... 81 23.2 Appendix 2: Coordinates of Mega’s mineral concessions in Argentina listed by province...... 82 23.2.1 Appendix 2A: Coordinates (in UTM) of Mega’s mineral concessions in Catamarca Province, Argentina...... 82 23.2.2 Appendix 2B: Coordinates (in UTM) of Mega’s mineral concessions in Chubut Province, Argentina: Bajo Colorado, Bajo Del Gualicho and Sierra Chata projects. 83 23.2.3 Appendix 2C: Coordinates (in UTM) of Mega’s mineral concessions in Mendoza Province, Argentina...... 89 23.2.4 Appendix 2D: Coordinates (in UTM) of Mega’s mineral concessions in Salta Province, Argentina...... 91 23.2.5 Appendix 2E: Coordinates (in UTM) of Mega’s mineral concessions in San Luis Province, Argentina...... 92 23.2.6 Appendix 2F: Coordinates (in UTM) of Mega’s mineral concessions in Santa Cruz Province, Argentina...... 93 24 Appendix 3: Certification - R.M. Spencer ...... 94 25 Appendix 4: Certification – R.A. Cleath ...... 95
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List of Figures
Figure Page Caption No No
4.1 Map showing the location of the Laguna Salada concessions. 16
Map showing the location of the principal areas of uranium 4.2 mineralization in the Laguna Salada Project relative to the property 19 boundaries.
Map showing the location of mineral concessions that constitute the 4.3 Cerro Solo East Project on a satellite image. Areas of known 20 mineralization in adjacent properties are also shown.
Photo showing the typical landscape and vegetation of the Laguna 5.1 23 Salada Project.
Map showing the general location of Mega’s concession areas in 5.2 24 Chubut Province relative to local infrastructure and towns.
Map showing the location of Mega’s Condor 2 and Condor 3 6.1 concessions in relation to CNEA’s concessions and areas of known 27 mineralization, the Cerro Solo deposit and the Los Adobes occurrence.
8.1 Genetic model for the formation of surficial uranium deposits. 31
Vertical cross section through part of the Guanaco area of the Laguna 9.1 Salada Project showing the characteristics of typical uranium 33 mineralization.
Ground radiometric map of the central part of the Laguna Salada Project 10.1 showing the location of trenches and bore hole collars relative to the 35 radiometric anomalies and concession boundaries.
Map of the Guanaco area of the Laguna Salada Project showing the 10.2 36 location of exploration trenches and bore hole collars.
Vertical cross sections showing interpreted results of trenching and 10.3 37 drilling in the Guanaco area of the Laguna Salada project.
5 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Grade-thickness plan of uranium mineralization in the Laguna Salada 10.4 40 Project area.
Map showing the location of trenches (black dots) and drill hole collars 10.5 41 (red dots) in the Lago Seco area of the Laguna Salada Project.
Vertical cross sections showing interpreted results of trenching and 42 10.6 drilling in the Lago Seco area of the Laguna Salada project.
Digital elevation model of topography in part of the Buried Lake area of 10.7 the Laguna Salada Project showing the location of a profile of bore 43 holes that shows continuity of mineralization.
Geological map of the Cerro Solo area showing the location of Mega’s 11.1 concessions and drill hole collars relative to the Cerro Solo deposit and 47 the Los Adobes occurrence.
Assay values obtained from repeat analysis of the 470 ppm U standard 13.1 56 that was inserted into the sample sequence from Laguna Salada.
Repeat analyses, plotted in chronological order of assay, of field blanks 13.2 57 that were inserted into the sample stream from Laguna Salada.
Comparative assay values obtained from field duplicate samples from 13.3 58 the Laguna Salada Project.
Comparative assay values obtained from pulp duplicate samples from 13.4 58 the Laguna Salada Project.
Map of Argentina showing the location of Mega’s properties in relation to 18.1 65 the Provincial boundaries.
Map of the Sierra Pintada uranium district showing the location of 18.2 CNEA’s Sierra Pintada deposit, uranium occurrences and the location of 68 Mega’s tenements.
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List of Tables
Table Page Title No No
Details of the number, type and area covered by concessions that 4.1 13 constitute Mega’s principal project areas in Argentina.
4.2 Details of the concessions that constitute the Laguna Salada Project. 17
4.3 Details of the concessions that constitute the Cerro Solo East Project. 18
Summary of significant equivalent U3O8 grade estimates from down-hole 11.1 gamma ray probe measurements in RC bore holes drilled by Mega in the 46 Cerro Solo East Project.
Summary of significant assay results from RC bore holes drilled by Mega 11.2 46 in the Cerro Solo East Project.
Summary of assay data for the Lago Seco area of the Laguna Salada 12.1 49 Project.
Summary of assay data for the Guanaco area of the Laguna Salada 12.2 50 Project.
Summary of assay data for the Buried Lake area of the Laguna Salada 12.3 51 Project.
Summary of assay results of screened versus non-screened samples 12.4 52 from the Laguna Salada Project.
Summary of results from leach tests carried out for CNEA on core 15.1 61 samples from the Cerro Solo deposit.
20.1 Proposed budget for the Laguna Salada Project. 72
20.2 73 Proposed budget for the Cerro Solo East Project.
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20.3 Proposed budget for the Condor Project. 74
20.4 Proposed budget for the Gato-Krugger Project. 75
20.5 Proposed budget for Reconnaissance Exploration. 75
20.6 Summary of the proposed budget for Mega’s properties in Argentina. 76
8 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
1 Summary
This report forms part of a due diligence that was undertaken on the mineral properties of Mega Uranium Ltd. (“Mega”) in Argentina for U3O8 Corp. This due diligence relates to the definitive agreement signed on February 16, 2010, whereby U3O8 Corp. intends to purchase Gaia Energy Ltd. (“Gaia”), a wholly-owned subsidiary of Mega that holds Mega’s mineral properties in South America. Gaia’s mineral properties in Argentina are held in wholly-owned subsidiaries, Maple Minerals Exploration and Development Inc. (“Maple”) and Mega Uranium Argentina S.A. (“Mega Argentina”).
This technical report provides a summary of the geological characteristics, exploration potential, appropriate exploration techniques and proposed budgets for Mega’s mineral properties in Argentina. The most advanced project, Laguna Salada, is emphasized while some detail is provided for the second most advanced project, Cerro Solo East. Brief descriptions are provided for the other mineral properties on which little exploration has been undertaken.
1.1 Laguna Salada Project
The Laguna Salada Project is located in the central part of Chubut Province, Argentina. The project area is characterised by flat-lying mesas that are separated by shallow, ephemeral, generally dry drainages that lead into larger tributaries or confined, shallow, saline lakes. The project is located in a part of Patagonia that is semi-desert with sparse grass-cover between isolated shrubs. This area lies within the Roaring Forties where wind speeds average 15 kilometres per hour (“km/h”) but can reach 100km/h.
The project was discovered as a result of follow-up of radiometric anomalies identified in an airborne geophysics program that was flown in the region by the Comisión Nacional de Energia Atómica (“CNEA” – the Argentinean National Commission for Nuclear Energy) in 1978. Mega applied for exploration concessions covering the most promising area identified after field-based reconnaissance confirmed anomalous radioactivity in the area. Mega’s land package now consists of 17 exploration properties that cover a total area of approximately 104,804 hectares (“Ha”).
Uranium mineralization at Laguna Salada is located within a tabular unit of unconsolidated sandy, matrix-supported gravel that is Quaternary in age. This tabular, gravel unit constitutes flat-topped mesas that stand proud of the surrounding plane by 10 to 20 metres (“m”). Mineralization is located on three adjacent mesas that are separated by shallow, dry drainages: the eastern mineralized zone is called the Guanaco area, the western area is called Lago Seco and the northern is Buried Lake.
Due to the pebbly, unconsolidated nature of the host, drilling was abandoned as an effective means of exploration after the completion of 51 bore holes. The majority of the exploration was through mechanised trenching with a backhoe. Trenches were excavated at approximately 200 metre (“m”) centres on a square grid over an area measuring 40 square kilometres (“km2”). Trenches average 6m in length. In some areas, additional trenching was done in order to evaluate the continuity of mineralization. A total of 726 trenches were excavated to an average depth of 3m. Mineralization has
9 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 proved to be laterally continuous in these trenches. In plan view, uranium mineralization is arranged in tongues that are elongated and northeast-trending.
. The principle uranium mineral at Laguna Salada is carnotite [K2(UO2) 2(VO4) 2 3H2O]. It occurs interstitial to sand grains and, to a lesser extent, as coatings to pebbles. The carnotite occurs in a flat-lying, to slightly undulating layer up to one metre thick and averaging approximately 50 centimetres (“cm”) thick. The lower contact of the mineralized zone is sharp, marked by a conspicuous yellow layer of carnotite, whereas the upper contact of mineralization is more diffuse. Mineralization is associated with calcite and gypsum.
The characteristics of the Laguna Salada project are similar to those of caliche–style uranium mineralization such as that which constitutes the Lake Maitland project in Western Australia.
It is recommended that the next phase of exploration at Laguna Salada should: Concentrate on confirming continuity of mineralization between adjacent trenches; Include a comprehensive Quality Assurance and Quality Control (“QAQC”) program with the use of field duplicate samples, duplicate pulps and certified standards; The existing dataset on density of the gravel should be augmented with additional measurements taken on a representative number of samples from widely distributed trenches throughout the mineralized zones; and Preliminary metallurgical test work should also be undertaken.
The budget for the above exploration at Laguna Salada is $300,000. If this work is successful and the rates of recovery of uranium from the metallurgical test work are adequate, a resource estimate should be undertaken on the Laguna Salada Project. The budget for the resource estimate is $100,000 for a total budget of $400,000.
1.2 Cerro Solo East Project
The Cerro Solo East Project is located some 60km northwest of the Laguna Salada Project in the Cretaceous San Jorge Basin. Access to the property is via Provincial Route 40 from the city of Trelew, located approximately 130km to the east of the property. Topography is marked by rolling hills separated by small ephemeral tributaries leading into steep-sided streams. Vegetation is low scrub with sparse grass-cover over shallow, poorly developed soil.
Mega’s Cerro Solo East Project area consists of 12 concessions that cover a total of 26,803 Ha.
Part of the property package adjoins the Cerro Solo deposit that is reported to contain a reserve of 10.3 million pounds (“mlb”) of U3O8 at an average grade of 0.3% U3O8. Mineralization at Cerro Solo is strata bound, consisting of tabular bodies containing disseminated and fracture-fill uraninite (UO2) and coffinite [U(SiO4)(OH)] in sandstones of the Los Adobes Formation of the Cretaceous Chubut Group.
Mega’s land package covers an area of radiometric anomalies in strata that overlie the target Los Adobes Formation. Although this area was previously explored by CNEA in
10 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 the 1970’s in the program that led to the discovery of the Cerro Solo deposit in 1979, more recent exploration has achieved encouraging results. Mega has drilled 37 vertical Reverse Circulation (“RC”) bore holes for a total of 3,186m on the Cerro Solo East Project and three of these holes returned assays of potentially economic grade (bore hole RCU-03 returned 2.0m at 0.112% U3O8, RCU-09 cut 1m at 0.212% U3O8 and hole RCU-07 cut 2m at 0.024% U3O8). Approximately 30% of the bore holes drilled by Mega intersected anomalous uranium with pyrite. By analogy with the Cerro Solo deposit, and other sandstone hosted stratiform deposits, pyrite constitutes a useful exploration guide since it extends beyond the deposit, providing a larger exploration target.
Mega’s planned exploration program for Cerro Solo East hinges on an Induced Polarization (“IP”) geophysics program that may help to define pyritic bodies associated with mineralization. These IP anomalies, integrated with prior drill results and other data sets, will be used to define targets for drilling in the next phase of exploration. Further drilling is contingent on the success of the IP-related planned exploration program. This exploration approach is fine-tuned to the small physical size of the target; the Cerro Solo deposit measures 1.2km by about 550m wide.
The budget for the IP survey and associated work on the Cerro Solo East Project is $220,000.
It is recommended that diamond drilling be used in future exploration on Cerro Solo East, as opposed to RC, so that characteristics of the geology of the target zone can be determined and the geometry of any mineralized zone observed in core. In addition, core sampling constitutes the first step in defining and quantifying differences between chemical assay values and estimated uranium grades from measurement of gamma ray intensity from a down-hole probe.
1.3 Other Properties
An exploration budget of $75,000 has been established for exploration of the Condor concession block and work will focus mainly on outcrop and trench sampling. Should this phase of exploration be successful, a drill budget would be proposed. The next step on the Gato-Krugger project involves limited RC drilling and sampling for a budget of $105,000. The other mineral properties in Mega’s portfolio are early-stage exploration plays on which approximately $200,000 is budgeted for reconnaissance exploration. These properties span a number of target types including sandstone-hosted, surficial and volcanic-hosted uranium. The majority of the mineral properties are in Chubut Province, with others located in the provinces of Mendoza, San Luis, Catamarca, Salta and Santa Cruz. In total, Mega has 101 properties totalling approximately 682,444 Ha in Argentina.
Legal due diligence has been performed on all of Mega’s mineral properties in Argentina and they have been found to be in good standing with the relevant Provincial Mining Authorities as of February 12, 2010.
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2 Introduction
This NI 43-101 Technical Report was written as a component of U3O8 Corp’s due diligence of Mega Uranium Ltd’s (“Mega”) properties in South America related to the definitive agreement signed on February 16, 2010, whereby U3O8 Corp. proposes to acquire Mega’s South American exploration properties, subject to certain regulatory and shareholder approval. Mega’s exploration properties in Argentina have been incorporated into a wholly-owned subsidiary, Gaia Energy Ltd. (“Gaia”), which U3O8 Corp. proposes to purchase. Mega’s exploration properties in Argentina are held by Maple Minerals Exploration and Development Inc. (“Maple”) and Mega Uranium Argentina S.A. (“Mega Argentina”), both wholly-owned subsidiaries of Gaia.
The purpose of this report is to provide a review of the status of Mega’s projects in Argentina. The most advanced project is considered to be Laguna Salada and the review of that project is designed to highlight areas which require attention and additional work in preparation for resource estimation. Additional information is provided on the Cerro Solo East Project, to which a significant proportion of the exploration budget for Argentina is destined. A brief summary is provided for the other properties held by Mega in Argentina on which little or no exploration has yet been done. Geological concepts and target-types are described for these less explored properties.
The information contained in this report was provided by Mega’s technical team in Argentina and details pertaining to the concessions were provided by Mega’s legal counsel in Argentina, with an independent review of the legal standing of the concessions provided by Saravia Frias Mazzinghi.
The authors undertook a site visit of the principal properties located in Chubut Province of Argentina between January 7 and January 15, 2010. Site visits were made to specific project areas as follows: January 8, 2010: Review of Gato-Krugger Project; January 9, 2010: Review of the Laguna Salada Project; January 10, 2010: Review of the Cerro Solo East Project; January 11, 2010: Review of the Condor, Mirasol and further review of the Cerro Solo East Project; January 12, 2010: Review of the Sierra Chata Project; January 13-14, 2010: Review of the legal status of Mega’s concessions and discussions regarding the other exploration properties in Argentina.
3 Reliance on Other Experts
The authors depend on the technical information, including the accuracy and representativeness, of assay data made available to U3O8 Corp. by Mega’s technical personnel in Argentina. In addition, U3O8 Corp. relies on the opinions of Mega’s legal counsel in Argentina and due diligence undertaken on U3O8 Corp’s behalf by independent legal counsel in Argentina, Saravia Frias Mazzinghi, on the legal status of the concessions included in the proposed transaction described in Section 2 above.
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4 Property Description and Location
4.1 Area of the Principal Properties
For each principal project area, details of the number of concessions and area covered by exploration concessions (“Cateos”) and mining concessions (“MDs”) are provided in Table 4.1. More detailed information on the concessions and their coordinates can be found in Appendices 1 and 2.
Table 4.1 Details of the number, type and area covered by concessions that constitute Mega’s principal project areas in Argentina.
Mining Exploration Concessions Concessions Total Province Project (MDs) (Cateos) No Area (Ha) No Area (Ha) No Area (Ha) Catamarca 4 37,499 4 37,499 Cerro Condor 2 8,112 2 8,112 Cerro Leon 5 38,032 5 38,032 Cerro Solo East 9 19,158 3 7,645 12 26,803 Gato-Krugger 6 59,958 6 59,958 Laguna 1 5,809 1 5,809 Colorada Chubut Laguna Salada 6 23,210 11 81,594 17 104,804 Mirasol 1 6,840 4 29,050 5 35,890 Sierra Cuadrada 1 5,209 8 70,354 9 75,563 Bajo Colorado 4 39,715 4 39,715 Sierra Chata 7 51,058 7 51,058 Bajo Del 1 9,946 1 9,946 Gualicho Mendoza 15 104,831 15 104,831 Salta 3 8,275 3 12,258 6 20,533 San Luis 3 28,952 3 28,952 Santa Cruz 4 34,939 4 34,939 Total 20 62,692 81 619,752 101 682,444
4.2 Property Application Process
There are two principal types of mineral concessions in Argentina: “Cateos” – which are exploration concessions - and mining concessions (Manifestación de Descubrimiento (“MD” - literally “notice of discovery”).
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4.2.1 Exploration Concessions (Cateos)
A Cateo provides the title holder with the exclusive right to explore for specified minerals within a defined area for a fixed period of time. The term of an exploration concession is related to its size. The term cannot be extended or renewed and the title holder cannot reapply for the same area within one year of its expiry.
The maximum size allowed for a Cateo is 10,000 Ha, made up of units that cannot exceed 500 Ha in extent. Property boundaries are defined in the exploration concession application or title and are not required to be physically marked in the field.
4.2.2 Mining Concessions (MDs)
A mining concession granted by the Provincial Mining Directorate (“PMD”) confers on the title holder the right to mine specific minerals for an indefinite term provided that the concession is kept in good standing with the authorities as discussed in Section 4.3 below. Legislation allows for mining concessions to be acquired in three ways:
By discovering an area of potentially significant mineralization as a consequence of an exploration program in an exploration concession; When significant mineralization is discovered by chance; that is, without an exploration process. This means that a mining concession can be applied for directly, without applying for an exploration concession first; or When a mining permit has been declared and registered as having expired due to non-compliance with the PMD’s requirements.
In order to legally register a mining concession, the applicant must reach agreement with the surface rights holder in a negotiation that is mediated by the PMD. Property boundaries are defined in the exploration concession application or title and are not required to be physically marked until the third anniversary of the date on which the MD was granted.
4.3 Maintenance of a Concession
4.3.1 Exploration Concessions (Cateos)
Fees are due twice a year on June 30th and December 31st and are based on the size of the concession. The fee for Cateos is 400 Argentinean Pesos (“$AR) per 500 Ha unit per annum. A work plan must be filed for each concession at the time that the application is made. The PMD has the right to verify that the work commitment has been met. Once a permit is granted for an exploration concession, an Environmental Impact Assessment (“EIA”) must be completed and filed with the PMD. Field work may not start until the EIA has been submitted to the authorities.
4.3.2 Mining Concessions (MDs)
The annual fee for an MD is $AR 80 per 100 Ha unit. Field work that establishes the limits of the discovery or mineralized zone must be done within 100 days of the date of registration of the MD. Within 30 days of the delineation of the mineralized zone, a request must be filed with the PMD for the inspection of the property in order for the
14 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 discovery to be independently confirmed by the State. On completion of the inspection and certification of the discovery, the mining right is formally registered by the PMD.
A work and investment plan is required to keep a mining concession in good standing. This plan must be designed to achieve a minimum annual revenue of 300 times the amount of the annual fee for the concession within five years of the date on which the request was made for the PMD to verify the discovery. Twenty percent of the planned investment required to achieve this level of production must be made in the first and second years of the five-year period and the remaining 60% of the required investment can be spread over the remaining three years as required. An affidavit quantifying the investment made each year must be submitted to the PMD. If the affidavit is not submitted or does not correspond with real investment, the PMD may provide notice of its intention to rescind the mining permission. There is a 30-day cure period, from the day that the notice of intention to terminate is received by the concession holder. At the end of the 30-day period, the mining concession is terminated and the area is declared to be open for staking.
Once a permit is granted for a mining concession, an EIA must be completed and filed with the PMD. Field work may not start until the EIA has been submitted to the authorities. The EIA must be updated every two years.
4.4 Mineral Concessions Comprising Mega’s Principal Projects in Argentina
A list of mineral concessions that comprise Mega’s principal projects in Argentina is provided in Appendix 1, while details of those that constitute the most important projects, Laguna Salada and Cerro Solo East, are discussed below.
4.4.1 Laguna Salada Project
Details of the concessions that constitute the Laguna Salada Project are provided in Appendix 1 and Table 4.2 and their location is shown in Figure 4.1. The exploration concessions constituting the Laguna Salada Project are owned by three entities including Mega, Mr. Gonzalo Riobó and a local Argentinean company, Fenix S.A. Mega has entered into an option agreement for the right to purchase the listed concessions from Mr. Riobó and Fenix S.A.
4.4.2 Cerro Solo East Project
Details of the concessions that constitute the Cerro Solo East Project are listed in Appendix 1 and Table 4.3, and their location is shown in Figure 4.2.
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Figure 4.1. Location of the concessions constituting the Laguna Salada Project shown on a satellite image. The inset shows the location of the concessions relative to Chubut Province. The coordinate system is POSGAR94 (WGS-84), Zone 3.
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Table 4.2 Details of the concessions that constitute the Laguna Salada Project.
Status of Reference Date of Work Concession Name Owner Type Size (Ha) No Application Commitment & EIA Laguna Salada II 14.624/05 Maple Cateo 20-Sep-05 Approved 2,023.0 Laguna Salada III 14.625/05 Maple Cateo 30-May-05 Approved 3,952.0 Laguna Salada IV 14.626/05 Maple Cateo 30-May-05 Approved 3,684.0 Hope 1 15.280/07 Riobó Cateo 3-Sep-07 Approved 10,000.0 Hope 2 15.281/07 Riobó Cateo 3-Sep-07 Approved 9,984.0 Hope 3 15.282/07 Riobó Cateo 3-Sep-07 Approved 9,985.0 Hope 4 15.283/07 Riobó Cateo 3-Sep-07 Approved 9,372.0 Hope 5 15.284/07 Riobó Cateo 3-Sep-07 Approved 9,878.0 Lago Seco 15.222/07 Riobó Cateo 28-May-07 Approved 3,442.0 Lago Seco 2 15.229/07 Riobó Cateo 15-Jun-07 Approved 9,998.0 Lago Seco Oeste 15576/09 Fenix Cateo 4-Jun-09 Pending 9,276.0 Lago Seco Sur 15623/09 Fenix MD 30-Jul-09 In Preparation 991.0 Guanaco 15313/07 Maple MD 5-Oct-07 In Preparation 6,998.0 GUANACO I 15496/07 Maple MD 10-Sep-07 In Preparation 4,009.0 GUANACO II 15497/07 Maple MD 10-Sep-07 In Preparation 4,009.0 GUANACO III 15498/07 Maple MD 10-Sep-07 In Preparation 4,009.0 GUANACO IV 15657/09 Maple MD 6-Oct-09 In Preparation 3,194.0 Subtotal Laguna Salada 17 104,804.0
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Table 4.3 Details of the concessions that constitute the Cerro Solo East Project.
Status of Reference Date of Work Concession Name Owner Type Size (Ha) No Application Commitment & EIA Condor 2 14.557/05 Maple Cateo 15-Apr-05 Approved 3,908.0 Condor 3 14.558/05 Maple Cateo 15-Apr-05 Approved 3,498.0 Puntero 15.299/07 FENIX Cateo 17-Sep-07 Approved 239.0 El Boliche 15.186/07 MEGA MD 14-Mar-07 Approved 3,498.0 Arroyo Perdido N 1 15.187/07 MEGA MD 14-Mar-07 Approved 928.0 Arroyo Perdido N 2 15.188/07 MEGA MD 14-Mar-07 Approved 324.0 Arroyo Perdido N 3 15.189/07 MEGA MD 14-Mar-07 Approved 2,435.0 A°Perdido Norte 4 15428/08 MEGA MD 14-Apr-08 Approved 2,853.0 A°Perdido Norte 5 15571/09 MEGA MD 27-May-09 Approved 2,923.0 Arroyo Perdido 15427/08 MEGA MD 14-Apr-08 Approved 3,300.0 Arroyo Perdido Sur 2 15572/09 MEGA MD 27-May-09 Approved 2,111.0 Arroyo Perdido Sur 3 15573/09 MEGA MD 27-May-09 Approved 786.0 Subtotal Cerro Solo East 12 26,803.0
4.5 Location of Mineralized Zones Relative to the Properties
The location of the principal mineralized zones encountered to date in the Laguna Salada Project area are shown relative to the property boundaries in Figure 4.2 and those within the Cerro Solo East Project are shown in Figure 4.3.
4.6 Royalties and Other Encumbrances
According to Argentinean federal legislation (Law No. 24. 196 “Mining Investment Law”), provinces may not demand a net smelter royalty (“NSR”) in excess of 3%. The NSR due to the provinces in which Mega has exploration properties, including San Luis, Mendoza, Catamarca, Salta and Chubut, is 3%. A mining incentive package in Santa Cruz Province includes a reduced NSR of approximately 1%.
Mega has agreements providing it the option to purchase mineral properties that are held by Fenix. S.A. and with Mr. Gonzalo Riobó. The terms of these agreements are confidential, but are in line with industry standards for such agreements covering early- stage exploration and mining concessions.
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Buried Lake Area
Guanaco Area
Lago Seco Area
Figure 4.2. Map showing the location of the principal areas of uranium mineralization in the Laguna Salada Project relative to the property boundaries.
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5km
Figure 4.3 Map showing the location of mineral concessions that constitute the Cerro Solo East Project on a satellite image. Areas of known mineralization on adjacent properties are also shown.
4.7 Other Required Permits & Environmental Liabilities
Environmental Impact Assessments are required as part of the process of maintaining exploration and mining concessions in good standing with the PMD, as discussed in Section 4.3. An initial EIA is required before field work is permitted on a concession and updates to the EIA are required before trenching and drilling are permitted.
At the date of this technical report, the authors are unaware of any environmental liabilities related to any of Mega’s concessions outside of work-related commitments associated with routine exploration of the concessions, including trenching and drilling, that has been in accordance with industry standards.
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4.8 Provincial Restrictions on Mining and Processing in Argentina
4.8.1 Chubut Province
In May 2003, the Provincial Legislature of Chubut approved Law No 5001 that prohibits metal mining by open pit methods as well as the use of cyanide in the processing of ore. The law makes provision for mining that may be undertaken in specific areas.
There are indications that the Provincial Government of Chubut is increasing its support for pro-mining legislation. The Governor of Chubut, Mr. Mario Das Neves, has referenced support for the re-implementation of mining practices and is willing to modify its current laws if social and environmental guidelines are adhered to. Pan American Silver Corp. recently acquired the Navidad silver project in Chubut, believed to be one of the world’s largest undeveloped silver deposits. Pan American Silver is reported to be confident and optimistic that it can develop the Navidad deposit in a socially and environmentally responsible manner as it has a proven track record of community and government relations specifically in South America. Pan American Silver is advancing constructive discussions with government officials at provincial and national levels, which show encouraging progress that the open pit mining ban could be lifted in 2010.
The 10 million pound (“mlb”) Cerro Solo uranium deposit in Chubut Province, one of Argentina’s largest known deposits, is presently owned and under development by CNEA, the Argentinean national nuclear authority, with plans to restart production. This state program is another indication that positive legislative change in the Chubut may be forthcoming in the near future.
4.8.2 Mendoza Province
Mendoza Province is host to Argentina’s largest known uranium deposit, the 30mlb Sierra Pintada deposit, which is owned by CNEA. Sierra Pintada, mined by open-pit methods, produced approximately five million pounds of uranium from 1979 to 1997 and was then put on care and maintenance due to low metal prices. CNEA’s plans to restart mining operations at Sierra Pintada in 2006 met with strong opposition from wine producers, farmers and local businesses due to environmental concerns and legacy issues from previous operations at the mine. The Federal Chamber of Appeals of the province of Mendoza has ordered the CNEA to abstain from reopening the mine because of environmental concerns.
On December 13, 2006, Mendoza’s parliament voted to suspend all open pit mining and halted permits for mining rights, exploration or open-pit metallic mining in the province. In June 2007, the province of Mendoza enacted Anti Mining Law No. 7722, which banned open-pit mining activity using chemicals such as cyanide, mercury and sulphuric acid, effectively shutting down gold and uranium mining.
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A group of mining companies and the CNEA have launched suits against the government of Mendoza challenging the constitutionality of the mining ban, but so far, without success.
4.8.3 Santa Cruz Province
In November 2009, the Province of Santa Cruz passed legislation for the creation of an “Area of Special Interest for Mining”, which designated roughly half of the province where mining development is permitted and a number of precious metal mines currently operate. Within the special interest area, mining and processing activities are restricted near cities and certain rivers and lakes.
The “Area of Special Interest for Mining” legislation permits mining east of National Route 40, from 4km of the shores of lakes and the axis of major rivers, and from 10km of city and town limits. In addition, the legislation permits the processing of ores from 20km of these major water features. The law creates an ad-hoc committee to evaluate the Environmental Impact Studies of the projects located outside the “Area of Special Interest for Mining”.
4.8.4 Salta Province
The Province of Salta promotes a mining-friendly environment citing the following assets as evidence that Salta is a good place to conduct mining: the Puna gas pipeline, judicial security, the power line to Chile, roads and the existence of a mining land registry.
In June 2007, the CNEA and the Salta Provincial Government (both through subsidiary entities) signed an agreement to re-commence uranium production at the Don Otto Uranium Mine located in the Salta Basin. CNEA is currently evaluating the economic feasibility to reactivate the mine.
Salta is under exploration by dozens of transnational mining firms, and government authorities, such as ex-mining minister Ricardo Alonso and national mining secretary Jorge Mayoral, have made trips to Australia and Canada to sell Salta as a new mining centre for uranium mining. In 2008, provincial authorities eliminated a series of royalty exemptions to encourage future mining projects.
4.8.5 Catamarca Province
Catamarca Province, in which mining accounts for about 20% of the economy, is viewed as a pro-mining jurisdiction. Cantamarca was the first province to apply a neoliberal mining framework. Major mining projects are located in the province, including Argentina’s largest mine, Minera Alumbrera, which produces gold and copper for Xstrata, Goldcorp and Yamana Gold. Minera Alumbrera has the right to mine the deposit by agreement with Yacimientos Mineros de Agua de Dionisio, an Argentine statutory entity which has title to the deposit and receives 20% of the net before tax proceeds. The province also has the Farallón Negro and Minas Capillitas mines, with large reserves of gold, silver, copper and tin.
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A series of mega-mining projects are currently under exploration and construction in the province although there has been high profile public opposition and environmental issues raised in recent years, including at Yamana Gold’s Agua Rica project, which is one of the most controversial mining projects in Argentina.
4.8.6 San Luis Province
In October 2008, the Senate of the Province of San Luis, Argentina approved the law entitled "Environmental Preservation and Restoration of the Mining Sector" which prohibits the use of contaminating chemical substances such as sodium bromide, cyanide, mercury, ammonium carbonate and sulphuric acid in all stages of metals mining activities. The legislation also mandates the creation of an environmental guarantee fund to ensure cleanup at the conclusion of a mine's life. Companies will have to deposit 7% of total investment costs in the fund. The ban governs both new enterprises and existing companies.
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography
5.1 Topography, Elevation and Vegetation
The Laguna Salada Project area is characterised by flat-lying mesas that stand proud of the surrounding plane by 10m to 20m. The mesas are separated by shallow, ephemeral, generally dry drainages that lead into larger tributaries or confined, shallow, saline lakes. The project is located in a part of Patagonia that is semi-desert with sparse grass-cover between isolated shrubs. The project is situated approximately 330m above mean sea level.
Figure 5.1 Photo showing the typical landscape and vegetation of the Laguna Salada Project.
23 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
5.2 Access
The Laguna Salada Project is located in Chubut Province, Argentina, within the local Department of Martires. Commercial airlines have regular scheduled flights to the coastal town of Trelew. The access to the project is via the all-weather, unpaved Provincial Route 48 from Provincial Route N 25, a paved highway that links the towns of Trelew and Las Plumas (Figure 5.2). The project area is located 53km south of Las Plumas.
The Cerro Solo East Project area lies approximately 60km northwest of the Laguna Salada Project. Access to the project is via Provincial Route 40 from the city of Trelew, located some 130km due east of the property (Figure 5.2). The project lies at an altitude of approximately 500m above mean sea level.
Figure 5.2 Map showing the general location of Mega’s concession areas in Chubut Province relative to local infrastructure and towns.
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5.3 Climate
The region is arid to semi-arid with average annual rainfall of approximately 200 millimetres (“mm”) that falls sporadically throughout the year with a peak of approximately 30mm per month between March and August. There are two distinct seasons with average daily temperatures ranging from 13° to 26° Celsius (“C”) in mid- summer (December & January) falling to a range of 2° to 10°C in mid-winter (June-July). Frosts are common throughout the winter. The above data are from the period 1981 and 1990 from the nearest meteorological station at Paso del Indio, located in the central part of Chubut Province, approximately 170km from the Project area (www.smn.gov.ar/bdatos).
Patagonia lies in the Roaring Forties – the wind blows strongly with average annual velocities of approximately 15km/h, but reach a maximum of 100km/h.
Climate does not have a significant impact on operations and exploration is undertaken year-round.
6 History
6.1 Laguna Salada Project
The Laguna Salada area was first identified as an area of interest for uranium exploration in an airborne radiometric survey that was undertaken by CNEA in 1978. The survey covered an area of approximately 100,000km2 in the adjoining provinces of Chubut and Santa Cruz. CNEA identified two principal radiometric anomalies in what is now termed the Laguna Salada Project: Lago Seco and Madreselva (now called “Guanaco”). CNEA recognized that the uranium mineralization is related to “caliches” – partial cementation of the host by calcium carbonates.
CNEA undertook basic exploration of the radiometric anomalies in 1980. Results were such that the Laguna Salada Project was downgraded in comparison with other targets in Chubut Province and the exploration concessions lapsed. After an evaluation of the exploration potential of the region, Mega applied for the right to explore for uranium in two areas of the Laguna Salada Project and commenced field work in May 2007. Initial results indicated good continuity of the mineralization at shallow depth in material that would be easy to mine, and hence the area was prioritized for further exploration. Mega made additional concession applications in the Laguna Salada Project area in 2007, 2008 and 2009 (Table 4.2).
6.2 Cerro Solo East Project
CNEA identified the Cerro Solo district as an area of uranium potential in an airborne radiometric program flown in the early 1970’s. Field-based exploration resulted in drilling in which the Cerro Solo deposit and satellite occurrences, such as Los Adobes and El Ganso, were discovered in 1979 (Figure 6.1). The drilling of 410 bore holes defined
25 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 mineralization in an area measuring approximately 1.2km long by approximately 550ms wide at Cerro Solo.
The Nuclear Assurance Corporation International (“NACI”) undertook a pre-feasibility study on the Cerro Solo deposit for CNEA in 1997. A reserve of 10.3mlb U3O8, at an average grade of 0.3% U3O8, was defined on the basis of assay results from 410 bore holes (CNEA, 1997). The study also reported that the deposit has an average grade of 0.2% molybdenum. The reserve estimate is historic in nature and is not National Instrument 43-101 compliant. The authors have not verified the historic reserve estimate for the Cerro Solo deposit and hence the estimate reported above should not be relied upon.
Exploration drilling undertaken by CNEA showed that uranium occurs in sandstones at similar stratigraphic levels in other parts of the district as it does in the Cerro Solo deposit and the Los Adobes occurrence. In addition, this drilling showed that the channel sandstone facies that contains the mineralization at Cerro Solo and Los Adobes can be traced in an east-west orientated swath across the district (Figure 6.1).
After exploring the district, CNEA reduced its mineral rights to cover specific targets. Mega applied for mineral concessions in the Cerro Solo district in 2005 and subsequently added to this ground position in 2007, 2008 and 2009 (Table 4.3).
7 Geological Setting
7.1 Laguna Salada Project
7.1.1 Regional Geology
The basement in the project area consists of the mid-Jurassic Marifil Formation which is composed of ignimbrites and rhyolitic lavas flows. The Jurassic sequence is unconformably overlain by the extensive, Cretaceous San Jorge Basin that covers most of Chubut Province. The lower part of the basin consists of volcaniclastic rocks, including tuffs, conglomerates and sandstones that outcrop in the southern and western part of the project area. These volcaniclastic rocks are overlain by a sequence dominated by marine sandstones that constitutes the Late Cretaceous to Early Tertiary Salamanca Formation in the project area. This is interpreted to have accumulated during one of the last marine transgressions by the Atlantic Ocean.
The Early Tertiary marine sequence is unconformably overlain by Cenozoic units of fluvial and alluvial origin. Uranium mineralization in the Laguna Salada Project is hosted by the matrix-supported conglomerates of the Montemayor Formation. Clasts are well- rounded, moderately well sorted and mainly volcanic in origin, consisting of basalt, andesite and rhyolite. The Montemayor Formation is upper Pleistocene in age and is overlain in some areas by a thin layer of Recent aeolian cover.
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Radiometric anomaly (5x background)
Figure 6.1 Map showing the location of Mega’s Condor 2 and Condor 3 concessions in relation to CNEA’s concessions and areas of known mineralization, the Cerro Solo deposit and the Los Adobes occurrence. The diagonally hachured area shows the extent of the channel facies sandstone in which the known uranium occurrences are located.
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7.1.2 Geology of the Laguna Salada Project
The Laguna Salada Project can be divided into three main areas, each of which has slightly distinctive styles of mineralization, geology and geomorphology. These three areas of mineralization are: Guanaco, Lago Seco and Buried Lake (Figure 4.2).
A Guanaco Area
The Guanaco area lies in the Quaternary terrace of the Rio Chico river system and it is limited to the east by the extensive, fault-related depression in which the Laguna Salada Lake is located. The terrace that contains the uranium mineralization in the Guanaco area forms a flat-topped mesa over 25km2 in extent.
The Montemayor Formation constituting the terrace consists of two units: the lowermost unit consists of interbedded sandstones and green to brown siltstones while the overlying conglomeratic unit has a generally planar basal contact that is occasionally interrupted by erosional channel features. The upper unit consists of unconsolidated, matrix-supported conglomerate arranged in crude, planar beds forming a unit 4m to 11m thick. The matrix consists of sand with some interstitial silt and is partially and patchily cemented with calcite and or gypsum. A thin carbonate-rich soil, with a maximum thickness of 50cm, partially covers the conglomerate units.
B Lago Seco Area
Uranium mineralization in the Lago Seco area lies within the Pampa de Arroqui Formation which is considered to have been formed through erosion of the Montemayor Formation. Geomorpholically, the Lago Seco area forms part of an extensive alluvial fan that is being dissected and eroded by the present ephemeral stream system.
The Pampa de Arroqui Formation lies unconformably on interbedded, greenish, marine mudstones and sandstones of the Early Tertiary Salamanca Formation. Drilling shows that the Tertiary sequence is about 30m thick in the project area. The Salamanca Formation lies unconformably on a sequence of Cretaceous tuffs and fine-grained sandstones that outcrop in the western part of the Lago Seco area.
The main lithology constituting the Pampa de Arroqui Formation is matrix-supported agglomerate and conglomerate with rounded pebbles up to 5cm in diameter. The total thickness of the conglomerate in the Lago Seco area varies from 50cm to 1.5m in thickness. Discontinuous layers of massive gypsum up to 30cm thick occur in some parts of the Lago Seco area.
C Buried Lake Area
Located in the northern sector of the Laguna Salada Project area, the geology of this area is similar to the Guanaco sector except that the Montemayor Formation, which
28 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 reaches 10m, is thicker than in the Guanaco area. The matrix of the unconsolidated gravel of the Montemayor Formation consists essentially of clay. The gravel lies unconformably on the Salamanca Formation which, in this area, consists of laminated mudstones interpreted to be lacustrine in origin. The first two metres of Salamanca Formation below the unconformity consists of a muddy unit with some organic matter, and it is this unit that contains the uranium mineralization in the Buried Lake Area. The depth of mineralization lies between 7m and 9m below surface.
7.2 Cerro Solo East Project
7.2.1 Regional Geology
The Cerro Solo East Project is located within the San Jorge Basin. The Cretaceous basin lies unconformably on a basement of the Jurassic, predominantly volcanic Lonco Trapial Formation, and the lower Cretaceous Cañadon Asfalto Formation. The Lonco Trapial Formation consists mainly of a diverse volcanic package that includes ignimbrites, lavas, andesitic and rhyodacitic agglomerates.
Basin fill consists mainly of continental sedimentary and volcaniclastic rocks of the Chubut Group. The basin is host to a number of uranium occurrences that are concentrated in three stratigraphic levels in the Chubut Province including: fluvial sandstones and conglomerates with abundant organic material of the Los Adobes Formation (oldest unit of the Chubut Group); tuffs of the Cerro Barcino Formation; and fluvial sandstones of the Puesto Manuel Arce Formation (youngest member of the Chubut Group).
Faults in the Cerro Solo district strike northwest and are related to the regional, Gastre fault system.
7.2.2 Geology of the Cerro Solo East Project Area
Uranium mineralization in the Cerro Solo deposit and Los Adobes and El Ganso occurrences are hosted in sandstones of the Los Adobes Formation of the Chubut Group. The project area is cut by northwest-striking faults that are responsible for displacing the target horizon up to 100m in a vertical sense. Mineralization at Cerro Solo occurs at a depth of approximately 40m below surface in the south, to about 80m in the north of the deposit; and it is inclined to the north. In contrast, the Los Adobes occurrence is located in the same stratigraphic unit that outcrops at surface (Fig. 6.1). This suggests that some of the larger faults have a southwest-block-down geometry. Northward thickening of the lower part of the Los Adobes Formation in the Cerro Solo deposit may constitute a growth sequence related to syn-depositional normal fault movement on the fault system.
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8 Deposit Types
8.1 Surficial Uranium Deposits
Surficial deposits comprise approximately 4% of the world’s uranium resources (World Nuclear Association, 2009). These deposits are typically tabular bodies of mineralization that are located in close proximity to the surface. They are typically located in sediments of Tertiary to Recent age in fluvial, alluvial and eolian channel fill and associated playa lake facies. These uranium accumulations occur with carbonate and, in some cases, sulphate. Surficial uranium accumulations span a diverse group ranging from mineralization associated with marginally carbonate-cemented sediments to that associated with hard, calcrete accumulations. Surficial uranium deposits form a continuum from those in which carbonate and or sulphate partially cements the host, termed “Caliche”-type systems, to those in which the carbonate and or sulphate cementation is intense, forming a hard layer within the host. The latter end-member is termed Calcrete-type. It appears that caliche-type systems would develop into calcrete- type systems over time.
Carbonate precipitation and calcrete formation is dependent on temperature, rainfall, evaporation rate, and availability of calcium carbonate. During the wet season in temperate climates, carbonate is dissolved in the vadose zone by oxidized meteoric waters percolating down through the developing soils. During dry periods, when evaporation is most intense, groundwater is drawn upwards, precipitating calcium carbonate as encrustations which develop into nodules that grow and coalesce to form a calcrete layer (Figure 8.1, Thomas et al., 2007). Calcrete can also form as a hardpan or duricrust within playa lake environments.
Figure 8.1 shows the typical host environment of a surficial uranium accumulation, which typically lies adjacent to basement rocks that are relatively enriched in uranium and other associated elements such as vanadium. Uranium in surficial deposits is thought to have been leached from such source rocks and transported to the site of deposition in the younger sediments by groundwater flow.
Examples of surficial uranium deposits are Yeelirrie and Lake Maitland in Western Australia and Langer Heinrich and Trekkopje in Namibia (World Nuclear Association, 2009).
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Figure 8.1 Genetic model for the formation of surficial uranium deposits.
8.2 Sandstone-Hosted Uranium Deposits
Sandstone-hosted uranium deposits contain about 18% of the world’s uranium resources and typically have a grade that ranges between 0.05% and 0.4% U3O8. One deposit may contain resources of up to approximately 100mlb U3O8 (World Nuclear Association, 2009, Kyser & Cuney, 2009). These deposits occur in clastic sequences and are known from the Proterozoic to the Tertiary. Uranium occurrences hosted by sandstones in Mega’s properties in Argentina are tabular to lens-shaped and do not have the typical arcuate form of roll-front deposits.
The clastic units that host these uranium deposits are continental in origin, formed in fluvial-lacustrine environments, intermontaine basins or fluvial shoreline systems. Most deposits are located in areas in which adjacent elevated basement, and associated provenance terranes, funnelled groundwater flow to, or through, chemical trap sites that were relatively rich in reductants. These deposits are located near the interface of oxidized sandstones with grey, pyritic sandstones typically located immediately down-dip of the uranium accumulations. Organic matter within the clastic host-rock plays an important role in the precipitation of uranium since it acts as a reductant for the uranium which is transported in oxidized fluids. Common reductants include carbonaceous material (plant debris, amorphous humate, algae), sulphides, hydrocarbons and ferromagnesian minerals in interbedded mafic volcanic rocks.
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One of the best known tabular-type sandstone-hosted uranium districts is the Grants River region in the San Juan Basin in New Mexico in the USA that contains resources of approximately 500mlb U3O8 (Kyser & Cuney, 2009).
Cerro Solo is a classic sandstone-hosted uranium deposit located in coarse-grained sandstones with associated organic matter in the Cretaceous Los Adobes Formation. Mineralization is hosted principally in two elongate lenses within the sandstone that contrasts with the curvilinear form in cross section and plan view that is typical of roll- front deposits.
9 Mineralization
9.1 Laguna Salada Project
The mineralization at Laguna Salada shows some variation between target areas. In general, however, it occurs in sub-horizontal layers at, or just below, surface.
9.1.1 Guanaco Area
Extensive trenching shows that the majority of mineralization occurs as carnotite . [K2(UO2) 2(VO4) 2 3H2O] in a sub-horizontal layer within the upper one to three metres from surface. Uranium mineralization is closely associated with carbonates, although some mineralization has a spatial association with clay-rich layers, possibly due to the adsorption of uranium onto the clay, especially along fractures and cracks in the clay. A cross section interpreted from data from adjacent trenches and bore holes in the Guanaco area is shown in Figure 9.1, demonstrating the sub-horizontal distribution of the mineralized layer (red) within the conglomeratic unit (pink).
Mineralization in the northern part of Guanaco is found at deeper levels, being concentrated at the unconformity between the Quaternary conglomerates and the clay- rich units of the underlying Tertiary Salamanca Formation. Uranium is found as carnotite that is concentrated along the fractures of the clay-rich zones at the unconformity at an average depth of 4m below surface. The thickness of the mineralized layer ranges from 60cm to 1.5m and averages approximately one metre thick. The interpretation is that the caliche-type uranium from the upper part of the conglomerate has been leached by oxidized meteoric water and precipitated at the unconformity in the northern part of the Guanaco area.
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Figure 9.1 Vertical cross section (Section 5091000) through part of the Guanaco area of the Laguna Salada Project showing the characteristics of typical uranium mineralization. Vertical grid-lines mark 200m intervals.
9.1.2 Lago Seco Area
Uranium mineralization in the Lago Seco area lies within one metre of surface beneath poorly developed, partial soil cover. The average thickness of the mineralized interval is 70cm. Mineralization forms a sub-horizontal layer that is associated with carbonate and gypsum that has partially cemented the conglomerate. The majority of the uranium mineralization is located in the matrix of the conglomerate with some carnotite encrusting the clasts.
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9.1.3 Buried Lake Area
Mineralization occurs in organic-rich, laminated mudstone. The principal uranium- bearing mineral is carnotite which occurs in cracks and as disseminations in the mudstone, as well as associated with carbonate nodules.
9.2 Cerro Solo East Project
Mineralization in the Cerro Solo East Project area occurs in coarse-grained sandstones of the Los Adobes Formation in close association with organic-rich tuffaceous mudstones. Uranium occurs with organic fragments and as interstitial uraninite (UO2) and coffinite [U(SiO4)(OH)]. Uranium occurs with pyrite, but the pyrite is not always associated with uranium. This suggests that pyrite occurs over a larger area that encloses more confined, uranium-bearing zones.
10 Exploration
10.1 Responsibility for Exploration
With the exception of the seismic survey and drilling undertaken on the Cerro Solo East Project, all of the exploration described in this Section was carried out exclusively by technical staff who have employment contracts with Mega. Drilling was contracted out to Patagonia Drill S.A. while Seismic Geophysical Exploration and Consulting S.A. undertook the seismic survey.
10.2 Laguna Salada Project
Early stage exploration in Laguna Salada Project concentrated on lithological mapping and demarcating the distribution of outcropping uranium mineralization. In parallel with the geological mapping, a ground radiometric survey was undertaken on a 100m square grid (Fig 10.1). Initial exploratory pitting and trenching confirmed that mineralization was widespread and required further exploration.
A second phase of exploration focused on drilling (of 51 RC holes for 1,657m), which was abandoned in favour of trenching. Trenches averaged 6m in length and varied between 1.5m and 4.5m in depth. Trenching was initially done at a nominal one kilometre grid spacing during reconnaissance exploration and this was reduced to a nominal 200m square grid over areas of interest. The grid spacing was reduced to 100m spacing in some areas as shown in Figures 10.2 and 10.4 in order to test the continuity of mineralization. A total of 726 trenches were excavated in the project area as follows: 370 in the Guanaco area; 262 in the vicinity of Lago Seco; and 94 in the Buried Lake area.
34 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Figure 10.1 Ground radiometric map of the central part of the Laguna Salada Project showing the location of trenches and bore hole collars relative to the radiometric anomalies and concession boundaries.
10.2.1 Guanaco Area
Exploration of the Guanaco area commenced in mid-2007 and continued through 2009. Trenching at Lago Seco covered an area of approximately 25km2. After initial trenching on a nominal 200m square grid, approximately 60% of the area was trenched at 100m spacing with some areas undergoing closer-spaced trenching in order to confirm details of the distribution of mineralization (Figure 10.2). East-west orientated vertical sections through the Guanaco area show that consistent mineralization between adjacent trenches can be interpreted as forming a shallow layer of mineralization (Figure 10.3). Correlation between sections shows that uranium is distributed in northeast-trending tongues that are separated by areas of poor, or less consistent, mineralization (Figure 10.4).
35 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
11,230 11,000 10,800 11,600
Key 10,000 9,800 Trench 9,600 9,400 Bore hole collar
9,200 Section line 9,000
8,800 8,600 Concession 8,400 boundary
Figure 10.2 Map of the Guanaco area of the Laguna Salada Project showing the location of exploration trenches and drill hole collars. The labels (eg 9,000) refer to the section line profiles shown in Figure 10.3. Green area shows the distribution of the terrace in which the Quaternary gravels occur.
10.2.2 Lago Seco Area
An area of approximately 10km2 was trenched at a nominal 200m spacing at Lago Seco (Figure 10.5) between mid-2007 and the end of 2009. Mineralization has similar distribution patterns in profile as well as in plan view to the Guanaco area (Figures 10.5 and 10.4 respectively).
36 Bore hole profile Trench
Figure 10.3 Vertical cross sections showing interpreted results of trenching and drilling in the Guanaco area of the Laguna Salada project. Vertical grid lines are at 500m intervals and the horizontal lines are at a 5m spacing. Interpreted continuity of mineralized zones between adjacent trenches and bore holes is shown in colour using the same colour scheme as is used in Figure 9.1. The location of the profiles is shown in Figure 10.2.
Bore hole profile Trench
Figure 10.3 cont. Vertical cross sections showing interpreted results of trenching and drilling in the Guanaco area of the Laguna Salada project. Vertical grid lines are at 500m intervals and the horizontal lines are at a 5m spacing. Interpreted continuity of mineralized zones between adjacent trenches and bore holes is shown in colour using the same colour scheme as is used in Figure 9.1. The location of the profiles is shown in Figure 10.2
NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Trench
Bore hole profile
Figure 10.3 cont. Vertical cross sections showing interpreted results of trenching and drilling in the Guanaco area of the Laguna Salada project. Vertical grid lines are at 500m intervals and the horizontal lines are at a 5m spacing. Interpreted continuity of mineralized zones between adjacent trenches and bore holes is shown in colour using the same colour 39 scheme as is used in Figure 9.1. The location of the profiles is shown in Figure 10.2.
Figure 10.4 Grade-thickness plan of uranium mineralization in the Laguna Salada Project area.
NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
10,400
10,000
Key
Trench 9,000
Bore hole collar 8,800 8,600 Section line 8,400
Concession 8,000 boundary
7,000
Figure 10.5 Map showing the location of trenches (black dots) and drill hole collars (red dots) in the Lago Seco area of the Laguna Salada Project. Section lines shown in Figure 10.6 are labelled in colour.
41 Trench
Bore hole profile
Figure 10.6. Vertical cross sections showing interpreted results of trenching and drilling in the Lago Seco area of the Laguna Salada project. Vertical grid lines are at 500m intervals and the horizontal lines are at a 5m spacing. Interpreted continuity of mineralized zones between adjacent trenches and bore holes is shown in colour using the same colour scheme as is used in Figure 9.1. The location of the profiles is shown in Figure 10.5
10.2.3 Buried Lake Area
Exploration in the Buried Lake area was undertaken between mid-2007 and the end of 2009. Uranium mineralization in the Buried Lake area occurs at, and immediately beneath, the unconformity at the base of the Quaternary gravels in the upper few metres of the Tertiary Salamanca Formation. Due to the 7m to 9m depth at which the mineralized zone is located, this area has not been extensively explored and continuity of the mineralization has not been defined. Four bore holes were drilled in the Buried Lake target area, three of which intersected significant mineralization over an average of 0.9m at between 6.2m and 8.7m depth below surface. Sample recovery from these bore holes was very poor, owing to the unconsolidated nature of the conglomerates, so no reliable assay values are available. A down-hole probe recorded a range of 800 to 1,100 counts per second (“cps”). These data suggest that uranium mineralization occurs as a sub-horizontal layer that shows continuity over at least 800m (Figure 10.7).
Bore hole profile
Trench
Figure 10.7 Digital elevation model of topography (red is relatively elevated ground) in part of the Buried Lake area of the Laguna Salada Project showing the location of a profile of bore holes (shown in the lower part of the diagram) that shows continuity of mineralization. NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
10.3 Cerro Solo East Project
Mega’s exploration of its concessions that lie to the east of the Cerro Solo deposit commenced with ground radiometric surveys with the aim of detecting radioactivity in outcropping sectors of the Los Adobes Formation or in leakage anomalies along faults related to mineralization at depth.
Several lines of seismic reflection were shot with two objectives: to define the configuration and depth of the prospective host rocks along the trend of a palaeochannel that extends eastwards from the Cerro Solo deposit; and to define the location of major faults in the area.
Soil and rock-chip sampling were also undertaken during a program of detailed geological mapping. Two drill campaigns were undertaken by Mega including 26 RC holes for 2,029m in 2006 and a further 11 RC holes for 1,057m in 2008 as described in Section 11.
11 Drilling
11.1 Laguna Salada Project
Mega drilled 51 RC holes for 1,657m on the Laguna Salada Project in 2008: 15 of these holes were drilled relatively deep (average approximately 80m) with the objective of exploring for mineralization in favourable stratigraphic units in the underlying Cretaceous stratigraphy; and 36 shallow holes (maximum 10m depth) were drilled in the three principal target areas of the Laguna Salada Project area to explore the shallow, caliche-style of mineralization.
The relatively long bore holes were unsuccessful in identifying significant mineralization at depth and this drilling gave way to a focus on investigation of the shallow mineralization. The shallow holes identified potential for uranium mineralization at the base of the gravel unit, principally in the Buried Lake area. However, given the depth of this mineralization, it was considered a low priority target and detailed exploration focused on the shallow mineralization which was investigated through trenching.
11.2 Cerro Solo East Project
In 2006, Mega conducted a RC drilling programme, comprising 26 widely-spaced vertical holes that ranged from 42m to 144m in length (total 2,029m), followed by an 11- hole RC program for 1,057m in 2008 (Figure 11.1). This drilling tested several targets located within a 10km radius of the Cerro Solo resource. Since the target stratigraphy has a dip of less than 10°, the sample length is considered to represent the true width of mineralization at Cerro Solo East.
Gamma ray measurements on bore holes drilled in the 2006 campaign were taken with a Mount Sopris probe (Model MGX II) rented from Demartini S.A. This probe was calibrated at the CNEA test facility located in Mendoza on April 12, 2006. In the 2008
44 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 drill program, gamma ray measurements were taken with Mega’s Mount Sopris probe (Serial No 4298) that was calibrated at the US Department of Energy’s Grand Junction facility on April 22, 2008, as well as with the rented probe. Comparison of the measured results revealed a strong correlation between the two probes.
The probes were lowered to the bottom of each RC hole on a cable and measurements were taken as the probe was winched up the hole at constant velocity. The speed at which the probe moved was such that a measurement was taken at approximately 10cm intervals, which is consistent with the conditions at which its k factor was established during calibration. Equivalent U3O8 grades were calculated using the following general formula:
G.T = k.A
Where:
G is the estimated U3O8 grade in ppm; T is the width of the sampled interval; k is a constant calculated during the calibration of the probe; and A is the area under the gamma ray intensity curve (measured in the bore hole).
Significant calculated equivalent U3O8 (“eU3O8”) grade intervals recorded from holes drilled in the two campaigns are shown in Table 11.1. Recovery from the RC drilling was relatively poor and there were significant differences between the estimated equivalent grade and the assay values obtained from RC chip sampling (Table 11.2). For the purposes of exploration, all significant values were used, be they from assay values or from probe measurements, to define areas of potential uranium enrichment.
The drilling programs undertaken by Mega on the Cerro Solo East Project were successful in underscoring the exploration potential of the property as follows: three bore holes intersected potentially economic uranium grades (Table 11.2); and approximately 30% of the holes intersected mineralization in the 100 to 500 ppm range over intervals from 1m to 5m thick. These are highly anomalous results that could be invaluable in developing an exploration model on which further work may be based.
Furthermore, it should be noted that approximately 70% of the bore holes drilled by Mega did not cut the entire stratigraphy of the Los Adobes Formation; they stopped within it and this may have left areas under-explored.
45 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Table 11.1 Summary of significant equivalent U3O8 grade estimates from down- hole gamma ray probe measurements in RC bore holes drilled by Mega in the Cerro Solo East Project. Please note that gamma ray probe measurements are significantly different from assay results of RC chip samples from the same bore holes as reported in Table 11.2. Therefore the eU3O8 values estimated from the gamma probe measurements should not be relied upon. These equivalent U3O8 grade estimates do not replace or supersede standard industry sampling and analysis procedure. These eU3O8 grade estimates are reported for completeness and the assay results from RC chip samples reported in Table 11.2 are more reliable than the eU3O8 grade estimates reported below.
Intercept eU O Grade BH No True 3 8 From (m) To (m) (%) Thickness (m) RCU-03 86.10 89.60 3.50 0.096 RCU-03 b 91.60 92.80 1.20 0.013 RCU-05 88.55 89.90 1.35 0.054 RCU-07a 55.35 56.80 1.10 0.014 RCU-07b 38.60 40.00 1.40 0.015 RCU-07c 40.00 42.00 2.00 0.011 RCU-07d 42.00 44.70 2.70 0.026 RCU-07e 44.70 46.10 1.40 0.018 RCU-09 55.35 56.80 1.45 0.129 RCU-14a 63.10 64.60 1.50 0.008 RCU-14b 64.60 65.60 1.00 0.024 RCU-18 46.80 48.00 2.00 0.017 RCU-20 49.80 51.70 1.90 0.006 RCU-21 41.20 44.10 2.90 0.026 RCU-23 17.50 36.00 18.50 0.009 RCU-24 27.70 30.90 3.20 0.014
Table 11.2 Summary of significant assay results from RC bore holes drilled by Mega in the Cerro Solo East Project.
Intercept U O Grade BH No True Thickness 3 8 From (m) To (m) (%) (m) RCU-01 26.0 27.0 1.0 0.010 RCU-03 85.0 90.0 5.0 0.059 Including 2.0 0.112 RCU-07 42.0 47.0 5.0 0.016 Including 2.0 0.024 RCU-09 56.0 57.0 1.0 0.212 RCU-14 65.0 66.0 1.0 0.008 RCU-20 51.0 52.0 1.0 0.010 RCU-21 43.0 46.0 3.0 0.015 RCU-23 47.0 52.0 5.0 0.006 RCU-24 28.0 31.0 3.0 0.009
46 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Figure 11.1 Geological map of the Cerro Solo area showing the location of Mega’s concessions (blue boundaries) and drill hole collars (blue dots) relative to the Cerro Solo deposit and the Los Adobes occurrence. Yellow labels identify drill holes in which significant uranium grades were intersected.
47 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
12 Sampling Method and Approach
12.1 Laguna Salada Project
12.1.1 Area Sampled
Due to the surficial, sub-horizontal nature of the uranium mineralization at Laguna Salada, the target area defined by airborne radiometric anomalies was subjected to wide-spaced reconnaissance trenching that was infilled to a nominal 200m approximately square grid over an area of about 40km2. To date, 726 trenches have been excavated and sampled in the Laguna Salada Project area. The trenches have undergone continuous channel sampling.
12.1.2 Nature of the Mineralization
Uranium mineralization occurs in two layers at Laguna Salada: The upper layer occurs from surface to a maximum depth of approximately 3m below surface, forming a slightly undulating, 50cm to 1.5m thick, tabular zone of yellow colouration due to the presence of the uranium mineral, carnotite, in the sandy matrix of the host gravels; and A second layer of similar mineralization is located near the base of the gravel unit. This deeper zone of mineralization is 30cm to 60cm thick and is located 3m to 5m below surface. In the Buried Lake target area, this style of mineralization at the basal unconformity of the gravels, lies at 7m to 9m depth and is of questionable economic interest at this time.
There is no obvious geological control on mineralization, with no clear association with any specific facies within the conglomerate unit. The principal control on caliche-related uranium mineralization is thought to be evaporation; hence the shallow, tabular nature of this style of mineralization.
The location of the mineralized unit is identified with a hand-held SPP/2 scintillometer and its contacts marked with spray paint, ready for sampling. The lower contact of the mineralized zone is generally sharp and clearly visible due to the yellow colour of the mineralization. The upper contact of the mineralized zone is generally more diffuse than the lower contact.
A summary of the grades of trenches from the three areas that comprise the Laguna Salada Project: Lago Seco, Guanaco and Buried Lake, is provided in Tables 12.1, 12.2 and 12.3 respectively.
48 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Table 12.1 Summary of assay data for the Lago Seco sector of the Laguna Salada Project. This table includes each fifth sample in the assay dataset for the Lago Seco area.
Gauss Kruger True Sample depth (m) Grade Trench Coordinates thickness of U O # mineralized 3 8 East (m) North (m) From To (ppm) interval (m) Pozo-01 3,395,753 5,089,985 0.0 0.6 0.6 197 TDLS-16 3,396,187 5,086,804 0.3 1.5 1.2 123 TLS-04 3,398,000 5,089,800 1.1 2.1 1.0 70 TLS-09 3,397,600 5,089,600 0.4 1.0 0.6 199 TLS-106 3,396,800 5,088,766 0.3 0.8 0.5 86 TLS-110 3,396,990 5,088,390 0.3 0.8 0.5 34 TLS-115 3,398,000 5,088,615 0.3 0.9 0.6 32 TLS-12 3,398,400 5,089,600 0.4 1.0 0.6 220 TLS-124 3,397,600 5,088,200 0.2 1.2 1.0 61 TLS-18 3,399,200 5,089,400 0.3 1.1 0.8 72 TLS-23 3,398,200 5,089,400 0.8 1.5 0.7 57 TLS-28 3,398,600 5,089,200 0.1 0.7 0.6 104 TLS-33 3,399,600 5,089,200 0.2 0.9 0.7 134 TLS-38 3,399,000 5,089,000 0.4 0.8 0.4 113 TLS-43 3,398,000 5,089,000 0.4 1.1 0.7 28 TLS-48 3,398,000 5,088,850 0.2 0.8 0.6 248 TLS-53 3,399,000 5,088,800 0.2 0.8 0.6 238 TLS-58 3,399,000 5,088,600 0.3 0.8 0.5 121 TLS-63 3,397,600 5,088,400 0.3 0.7 0.4 154 TLS-68 3,398,599 5,088,470 0.0 0.8 0.8 98 TLS-73 3,398,101 5,088,089 0.4 1.6 1.2 87 TLS-78 3,396,804 5,089,161 0.4 1.4 1.0 105 TLS-83 3,399,000 5,089,800 0.0 0.6 0.6 61 TLS-88 3,396,800 5,089,800 0.6 1.6 1.0 12 TLS-93 3,394,400 5,089,600 0.3 1.3 1.0 12 TLS-98 3,397,000 5,089,320 0.2 1.2 1.0 59 TLS-D 3,399,108 5,088,969 0.3 0.8 0.5 165 TRT-86 3,400,500 5,089,500 0.2 2.9 2.7 16
49 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Table 12.2 Summary of selected assay data for the Guanaco sector of the Laguna Salada Project. This table includes each tenth sample in the assay dataset for the Guanaco area.
Gauss Kruger Sample depth (m) True Coordinates Grade Trench thickness of U O # mineralized 3 8 East (m) North (m) From To (ppm) interval (m)
CAL-06 3,405,200 5,090,200 0.3 1.9 1.6 53 CAL-14 3,404,400 5,090,599 0.4 1.4 1.0 55 CAL-21 3,404,800 5,090,800 1.2 2.2 1.0 14 CAL-31 3,405,202 5,089,797 0.2 1.6 1.4 85 CAL-40 3,404,801 5,089,599 0.3 2.0 1.7 44 CAL-47a 3,404,910 5,089,695 0.4 1.9 1.6 106 CAL-48e 3,404,976 5,089,600 0.3 1.0 0.8 137 CAL-56 3,405,895 5,090,700 0.2 1.1 0.9 58 CAL-66 3,404,800 5,088,800 0.2 2.0 1.9 31 CAL-75 3,404,855 5,091,000 0.3 1.1 0.8 147 TRM-03 3,402,782 5,091,738 0.2 1.9 1.7 115 TRM-12b 3,403,830 5,091,591 0.9 1.7 0.8 20 TRM-21 3,403,395 5,090,236 1.1 1.8 0.7 1,055 Trr-01a 3,403,333 5,091,244 2.7 3.2 0.5 12 Trr-04 3,403,669 5,091,226 0.3 0.9 0.6 27 Trr-09 3,403,737 5,091,695 3.7 4.6 0.9 165 Trr-15b 3,403,398 5,090,206 1.8 2.4 0.6 436 Trr-22 3,404,100 5,090,200 0.3 1.1 0.8 159 Trr-27 3,404,345 5,091,225 0.3 1.6 1.4 98 Trr-32 3,404,940 5,091,229 0.2 1.2 1.0 514 Trr-40b 3,403,800 5,090,039 1.8 2.2 0.4 1,612 TRR-65 3,403,600 5,091,600 0.6 1.5 0.9 310 TRT-78 3,402,500 5,090,500 1.2 2.2 1.0 12
50 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Table 12.3 Summary of assay data for the Buried Lake sector of the Laguna Salada Project. This table includes each fifth sample in the assay dataset for the Buried Lake area.
Gauss Kruger Sample depth (m) True Grade thickness of Trench # U O East (m) North (m) From To mineralized 3 8 (ppm) interval (m) TRT-02e 3,401,886 5,093,983 0.1 1.1 1.0 179 TRT-02d 3,401,886 5,093,988 0.0 0.3 0.3 12 TRT-08 3,402,057 5,092,643 0.2 2.7 2.5 131 TRT-101 3,401,074 5,094,686 1.1 2.1 1.0 13 TRT-11 3,402,546 5,092,443 0.1 2.0 1.9 12 TRT-17 3,401,850 5,092,249 0.2 2.2 2.0 203 TRT-21 3,402,046 5,092,284 0.7 1.7 1.0 87 TRT-27 3,401,291 5,093,239 0.4 2.8 2.5 12 TRT-31 3,401,953 5,093,127 0.3 1.3 1.0 17 TRT-34b 3,401,578 5,093,504 0.0 3.3 3.3 12 TRT-39 3,402,018 5,092,943 0.6 1.6 1.0 13 TRT-44 3,402,158 5,093,748 7.9 8.9 1.0 12 TRT-48b 3,401,294 5,093,901 1.4 1.5 0.1 1,278 TRT-51b 3,401,619 5,093,991 2.4 2.8 0.4 12 TRT-58 3,401,687 5,094,098 1.8 2.8 1.0 52 TRT-67 3,401,203 5,093,398 1.9 2.9 1.0 12 TRT-94 3,401,498 5,094,221 0.5 0.7 0.2 59 TRT-97b 3,401,535 5,094,264 0.9 1.9 1.0 12
12.1.3 Sampling Procedure
The upper and lower contacts of the mineralized intervals were marked in the trench wall with spray paint as described above. Any overlying, barren material was then removed by hand with a shovel in the early trenches, or with a mechanical backhoe in the later trenches, revealing the top of the mineralized zone. A channel was then dug to the base of the mineralized zone, and then along the mineralized zone, parallel to the trench wall. The removal of the mineralized gravel resulted in a step-like geometry to the trench wall with one step located at the base of the mineralized zone and the second step being the depth to which the trench was originally dug to reveal the width of the mineralized zone. The mineralized gravel was removed by hand with a shovel, or with the mechanized shovel, and placed on a plastic sheet adjacent to the trench.
The average thickness of the mineralized zone was measured and recorded against the location of the trench using Gauss Kruger co-ordinates determined from a differential GPS. One channel sample was taken from trenches less than 5m long and two continuous samples were taken from trenches longer the 5m. One sample would be
51 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 taken from each level in trenches in which both the upper and lower mineralized zones are located.
The sample method utilized in the trenches changed over time as follows: Originally, a channel sample through the mineralized zone was taken from a 30cm wide interval with either a shovel or hammer. The sample was collected from a plastic sheet placed at the bottom of the trench below the section of the trench wall being sampled. In unstable trenches, where it was too dangerous to enter the trench, the sample was collected from sandy gravel shovelled from the pit wall onto a plastic mat located adjacent to the trench. After determining that the majority of mineralization occurs in the fine- to medium-grained sandy matrix of the conglomerate, samples were screened into three fractions: greater than 5/8”, between 5/8” and 1/4”, and less than 1/4”. The mass of the whole sample was recorded, as was the weight of each of the three fractions. The average pre-split sample weight was 6 kilograms (“kg”). The <1/4” material was sent to the laboratory for analysis as described in Section 13.1.2 below.
In September 2008, sampling methodology was changed in order to obtain a larger, more representative sample from the trenches. A mechanical backhoe was used to excavate a sample from the level of the mineralized layer in the trench and the sample was dumped onto a plastic sheet adjacent to the trench. Sample size ranged from 60kg to 140kg. The sample was homogenized by rolling. The cone- shaped sample pile was then quartered and screened into the three size fractions used in the original sampling. The <1/4” fraction was sent to the laboratory for further preparation and analysis. The weight of each screened fraction was recorded as well as the total weight of the quartered sample before screening.
A comparison of assay results from the screened versus non-screened samples from the Lago Seco, Guanaco and Buried Lake area is provided in Table 12.4. These data suggest that screening is beneficial in the Lago Seco area where the average grade of screened samples is 130ppm U3O8 in comparison to 120.8ppm U3O8 for unscreened samples. Unscreened samples from the Guanaco and Buried Lake areas have higher average values than the screened samples.
Table 12.4 Summary of assay results of screened versus non-screened samples from the Laguna Salada Project.
U O ppm No of No of 3 8 Project area Type of sample Trenches Samples Average Low Hi Screened 265 271 125.90 4.70 837.80 Guanaco Not Screened 235 222 137.00 7.10 1,611.70 Screened 234 237 130.00 2.40 464.50 Lago Seco Not Screened 138 139 120.80 11.80 600.10 Screened 77 79 63.10 2.40 626.20 Buried Lake Not Screened 80 88 147.50 4.70 1,845.10
52 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
12.1.4 Accuracy of Sampling and Potential for Sample Bias
The unconsolidated nature of the host of the uranium mineralization at Laguna Salada provides some challenges in terms of sampling. Shallow drilling in the unconsolidated gravel proved to be ineffective in providing a representative sample. Trenching proved to be far more practical than drilling in this near-surface, unconsolidated environment. In addition, trenching provides a large sample, which inherently should provide a more accurate estimate of the grade of the mineralized horizon than the relatively small sample that would be generated by shallow drilling. The negative aspect of trench sampling is that it is open to inadvertent over- or under-sampling of the mineralized zone by the personnel doing the sampling. Such sample bias may be a factor in sampling undertaken before September 2008, when sampling was done by hand. Mechanized sampling with a backhoe, introduced in September 2008, should have eliminated the possibility of sample bias and hence the samples are considered to be representative of the mineralization.
12.1.5 Use of Reference Materials and Field Duplicate Samples
Standards and blank samples were inserted in the sample sequence at an average of one reference sample per 32 samples. The frequency of reference sample insertions ranged from one per 13 field samples to one in 34 samples.
In addition, field duplicate samples were inserted into the sample stream at an average frequency of one per 45 samples. Unfortunately not all sample requisitions incorporate field duplicate samples. All samples were weighed prior to packing for shipment.
12.1.6 Density Measurements
Specific gravity was measured for 268 non-screened sandy conglomerate samples. It was calculated by dividing the mass of the dry sample by the volume of the sample, which was established by measuring the volume change when the sample was placed into a calibrated container of water. Volume for a split of each sample was measured in both 22 and 65 litre volumes of water. The average specific gravity for the 22 litre measurement was 1.74 while the specific gravity for the 65 litre measurement was 1.69.
12.2 Cerro Solo East Project
12.2.1 Nature of the Mineralization
Mineralization in the Cerro Solo East Project area is similar to that reported from the Cerro Solo deposit. Mineralization is hosted by a coarse-grained pebbly sandstone that contains organic fragments that are preferentially mineralized in comparison to the enclosing sandstone. Uranium occurs associated with organic fragments and as coffinite and urananite disseminated in the coarse-grained sandstone host near its contact with tuffaceous, organic-rich mudstone. Uranium mineralization is associated with the molybdenum minerals, jordisite and ilsemannite, in some intercepts and pyrite is ubiquitous.
53 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
Uranium-bearing zones are suspected to be stratiform and intercepts of significant uranium mineralization encountered in drilling to date vary from 1m to 5m in thickness.
12.2.2 Sampling Procedure
Rock-chip sampling in the Cerro Solo East Project area followed standard procedures for reconnaissance exploration. These samples were collected over an area of some 100km2 during reconnaissance of the concession area aimed at finding indications of uranium and or pathfinder elements. Reconnaissance sampling therefore does not attempt to quantify mineralization in any way. Such sampling is inherently biased and its aim is to identify areas of anomalous mineralization.
Sampling of rock cuttings generated by RC drilling involved routine sampling techniques as per standard industry practise. Cuttings from each one metre core interval generated approximately 70kg of drill chips. The cuttings were heaped to form a cone which was quartered, heaped and quartered again to obtain a sample of approximately 8kg. The entire 8kg sample was bagged, sequentially numbered and sample numbers were recorded against drilled depth. No control samples were inserted into the sample stream from this early-stage, exploratory drilling. Each bore hole was tested with a gamma probe in order to provide an independent confirmation of the presence of mineralization. Recovery from the RC drilling was reported to be problematic.
12.2.3 Accuracy of Sampling and Potential Bias
A comparison of the equivalent grades estimated from the gamma probe (Table 11.1) and assay values for the same bore holes (Table 11.2) show significant discrepancies between the two. Poor recoveries were reported from the RC drilling at Cerro Solo East and hence it is meaningless to try to establish a relationship between assay grade and estimated grade derived from probing the bore hole. However, future work should, as a priority, aim to determine causes of the discrepancies so that they can be rectified. These discrepancies may be due to one or a combination of the following factors: Poor core chip recovery resulting in under-sampling of the mineralized zone; Heterogeneous distribution of the mineralization – nugget effect possibly due to the concentration of mineralization in scattered organic matter which is detected by the probe from, not only the walls of the bore hole, but also from the volume of rock adjacent to the hole. The actual drill sample represents a smaller volume of rock than the probe is analyzing; and Disequilibrium could partially account for the difference between estimated and assayed values.
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13 Sample Preparation, Analysis and Security
13.1 Laguna Salada Project
13.1.1 Responsibility for Sampling and Sample Security
Initial sampling was done by employees and personnel working directly under contract to Mega. From September 2008, sampling was done by the operator of the backhoe under the direction of employees and contractors to Mega. Handling of the sample, including homogenization, quartering, screening, bagging and numbering, was done by these employees and contractors.
Field samples were transported in Mega’s vehicles to the base-camp where they were stored in a covered, locked shed. Samples were then trucked to the preparation facility in Mendoza Province by an independent, commercial transport company.
13.1.2 Sample Preparation and Assay
Samples taken between July 2007 and June 2008 were prepared and analyzed by Alex Stewart Assayers Argentina S.A. The samples were dried, jaw crushed to -10 mesh (2.0mm grain size), riffle split and pulverized with a ring and puck to -140 mesh (106 micron grain size). A split of the -140 mesh pulp was analyzed using Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) or Coupled Plasma Mass Spectrometry (ICP-MAS). Digestion was by aqua regia in the early samples while later sample preparation utilized four-acid digestion.
Samples taken after June 2008 were submitted for preparation at ALS Chemex in Mendoza, Argentina. Samples were bar coded and weighed. The samples were then dried and fine crushed to minimum 75% passing through a 2mm sieve. The sample was then passed through a riffle splitter and a 250 gram sub-sample was pulverized using a ring and puck to 85% of the sample material having a grain size of less than 75 microns. These 75 micron sample pulps were sent to the ALS Chemex analytical facility in Lima, Peru, for analysis. Samples were analyzed by ICP-AES after four-acid digestion.
13.1.3 Quality Assurance and Quality Control (“QAQC”)
A Reference Materials (In-house “Standard”)
A reference sample was prepared from sandy gravel collected from high-grade trenches in the Guanaco zone. Approximately 200kg of mineralized material was collected and homogenized. The sample was then split into 1kg samples which were used as reference material that was inserted in the sample stream with the objective of monitoring analytical precision. The reference material was analyzed repeatedly during routine analysis of the sample stream by ALS Chemex. The reference material was found to have an average value of 470 ppm U. The sample material was not crushed and pulverized to make a homogenous pulp, nor was the standard subjected to a Round
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Robin in which assays from at least three laboratories are used to establish the accepted average grade of a reference sample. These 1kg reference materials were inserted into the sample stream in the field before batches were transported to the preparation facility.
Using a 15% variation in U analytical results for the 470ppm reference material, 8 out of 14 standards inserted into the sample assay string failed (Figures 13.1). No re-assay was done to verify analytical results from the sample strings associated with the failed standards.
Figure 13.1 Assay values obtained from repeat analysis of the 470 ppm U standard that was inserted into the sample sequence from Laguna Salada. The diagram also shows the +/-5%, +/-10% and +/-15% ranges of acceptability for these repeat assays.
B Field Blanks
The objective of inserting coarse blank material in the sample sequences delivered to the preparation laboratory is to check for possible contamination and inadvertent sample switching in the preparation phase. Material for a coarse field blank was prepared from a marine sandstone from the Salamanca Formation. This material consisted of rock fragments that were bagged and numbered in sequence with the field samples and underwent jaw crushing to approximately 2mm fragment size, and then were subsequently milled to 140 mesh (nominal 106 micron) particle size.
A total of 14 blanks were inserted in sample sequences from trenching in the Lago Seco area of the Laguna Salada Project. Analyses from the blanks confirm its low uranium grade (average 2.6ppm U), excluding one outlier. Repeat assay data for the blank show one outlier at 21.7ppm, which is considered to be a failure since it lies outside of the +/- 15% tolerance range from the average assay of the blank (Fig. 13.2). Hence, one of 14 field blanks failed QAQC. The sample string associated with the failed blank sample was not re-analyzed.
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Figure 13.2. Repeat analyses, plotted in chronological order of assay, of field blanks that were inserted into the sample stream from Laguna Salada.
C Field Duplicate Samples
Eleven field duplicate samples were inserted into the sample stream and underwent preparation and assay along with the samples from the trenches. Of the 11 sample pairs, one failed the +/-15% criteria for acceptability (Figure 13.3). The sample string associated with this QAQC failure was not re-analyzed.
D Laboratory Duplicate Samples
Assay values for 85 pulp duplicates are reported and show excellent consistency with no failures (Figure 13.4).
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Figure 13.3 Comparative assay values obtained from field duplicate samples from the Laguna Salada Project.
Figure 13.4 Comparative assay values obtained from pulp duplicate samples from the Laguna Salada Project.
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13.1.4 Adequacy of Sampling, Security and Analytical Procedures
In terms of adequacy of security for the samples, it is the opinion of the authors that the procedures used by Mega are in line with industry standards. It is suggested that a QP periodically undertake some check sampling in which an unbroken chain of custody is maintained until delivery of the samples at the preparation laboratory. Any significant bias between assay results for the QP’s check samples and the routine samples should identify any potential problems related to sample security.
Sample preparation and assay were carried out by ALS Chemex (“ALS”) and Alex Stewart laboratories, both of which are well-known assay facilities with appropriate certifications.
13.2 Cerro Solo East Project
13.2.1 Responsibility for Sampling and Sample Security
As for Section 13.1.1 above.
13.2.2 Sample Preparation and Assay
As for Section 13.1.2 above.
13.2.3 Quality Assurance and Quality Control
Due care was taken with the splitting and handling of the rock-chips from the RC drilling and sample handling and security was according to standard industry practises. However, no duplicate samples, blanks or standards were used and therefore QAQC does not meet industry standards on the Cerro Solo East Project.
13.3 Certification of Laboratories
Alex Stewart Laboratories are part of the Stewart Group which has analytical laboratories in many parts of the world and has been in operation for 30 years. Its Canadian laboratories are fully accredited to ISO 9001-2000 and are currently working towards ISO 17025 accreditation.
ALS is a global diversified testing services organization. Its Mendoza laboratory, where samples were prepared for analysis, has been in operation since 2001. The Vancouver laboratory in which the assay work was performed has ISO 9001-2000 and ISO 17025 accreditation.
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14 Data Verification
14.1 Laguna Salada Project
QAQC procedures used on the Laguna Salada Project involved the use of field blanks, field duplicates, pulp duplicates and repeated analysis of a reference sample that was prepared from mineralized material from the project area. In the opinion of the authors, QAQC procedures were adequate, but a notable shortcoming is that no action was taken to rectify potential problems indicated by failures in the QAQC data. Sample strings associated with the failures identified in Section 13 should be reanalyzed with certified standards inserted at an interval of one per 25 samples in order to verify the analytical data to a level of confidence appropriate for resource estimation.
Other observations relating to QAQC procedures are as follows: It should be ensured that all assay runs contain adequate control samples including blanks, certified standards and ideally, field duplicate samples. Sample sequences that do not contain control samples should be re-analyzed with control samples inserted at an appropriate frequency. Certified standards should be purchased to augment any reference materials made from mineralized gravels from the project. There is certainly merit in using material from the project as a reference sample, provided that the reference material is prepared according to the accepted, rigorous procedures associated with the production of a standard. The reference sample currently in use from Laguna Salada does not conform to the stringent requirements of preparation of a true standard. Pulp and 10 mesh duplicate samples should be assayed at in independent laboratory as a check on possible bias at Alex Stewart and ALS Chemex laboratories.
It is the opinion of the authors that the sample procedure used at Laguna Salada is in line with industry standards. Furthermore, potential problems with the quality of the assay data have been adequately flagged by the QAQC procedures used. Upon rectification of these potential problem areas by the means described above, it is the opinion of the authors that the resulting assay database will have the integrity appropriate for use in a resource estimation. That being said, it is likely that a resource estimator will require a tighter trench spacing over parts of the property and further proof of continuity of mineralization between existing trenches.
14.2 Cerro Solo East Project
No control samples were used with samples from the RC drilling campaign in the Cerro Solo East Project area. Furthermore, the significant discrepancies between assay values and estimated grades calculated from a down-hole gamma ray probe show that there are issues that need to be resolved as a priority in the further exploration of the project as discussed in Section 12.2.3 above. Core drilling may provide a means of establishing many of the basic relationships of the mineralization to the host rock and may provide a means of resolving the discrepancies noted.
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It is recommended that pulps from the mineralized intervals encountered in the RC program be reassayed with certified standards inserted at appropriate intervals as a means of partially verifying the assay data. Adoption of appropriate QAQC procedures in further exploration of the Cerro Solo East Project will lead to the development of an assay database of proven integrity.
In the opinion of the authors, the accuracy of the assay data from the RC drilling on the Cerro Solo East Project cannot be adequately verified at this time. However, the exploration carried out to date has been successful in demonstrating the presence of uranium mineralization associated with pyrite in the target stratigraphic unit. The exploration carried out to date provides a platform for further exploration that should incorporate appropriate QAQC procedures.
15 Adjacent Properties
15.1 Laguna Salada Project
The Laguna Salada Project is geographically isolated from other known mineral occurrences and hence there is no relevant information from adjacent properties.
15.2 Cerro Solo East Project
The Cerro Solo East Project lies adjacent to the CNEA’s Cerro Solo uranium deposit that is reported to contain a resource of 10.3mlb U3O8 at an average grade of 0.3% U3O8. Results of indicative metallurgical test work carried out for CNEA are shown in Table 15.1 using conventional leach methods at laboratory scale.
The authors have not verified the resource estimate nor the leach tests reported in Table 15.1 for the Cerro Solo deposit and this estimate and metallurgical test result should not be relied upon. The information reported from the Cerro Solo deposit is not necessarily indicative of the mineralization that may be encountered in the Cerro Solo East project area.
Table 15.1 Summary of results from leach tests carried out for CNEA on core samples from the Cerro Solo deposit (CNEA, 1997).
Uranium Molybdenum Sample Head grade Recovery Head grade Recovery (ppm) (%) (ppm) (%) 1 932 67.3 484 26.7 2 681 74.3 200 47.4
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16 Mineral Processing and Metallurgical Testing
Mineral processing and metallurgical testing has not been undertaken on any of Mega’s Argentinean concession areas. It should be noted that although the style of mineralization encountered in drilling on Mega’s Cerro Solo East Project is similar to that of the Cerro Solo deposit, there is no guarantee that similar processing techniques will be applicable to the Cerro Solo East Project. Similarly, the metallurgical recoveries reported in Table 15.1 above are for reference only and are not intended to imply that similar recoveries may apply to any mineralization discovered on the Cerro Solo East Project.
17 Mineral Resources and Mineral Reserve Estimates
No mineral resource nor reserve estimates have been made on Mega’s Argentinean projects.
18 Other Relevant Data and Information
18.1 Introduction
This section deals with the host of other exploration concessions that Mega has in Argentina (Figure 18.1). The objective here is to provide some information on the target types and exploration concepts that led to the staking of these concessions. Most of the concessions, presented below by province, have had little work done on them and hence it is premature to attempt to rank them according to their uranium potential. The exception to this is Chubut Province, where Mega has focused its exploration and initial work has led to the definition of priorities for further exploration. Therefore, the projects discussed in Section 18.2 below are ranked in order of merit judged on the exploration data as it stands. This ranking is likely to change as the properties are explored further.
A list of Mega’s concessions is provided for each province in Appendix 1, and the coordinates of the concession boundaries are listed in Appendix 2.
18.2 Projects in Chubut Province
18.2.1 Condor Project
Target type: Sandstone-hosted uranium in the Los Adobes Formation.
The Condor tenements are located 18km west of the Cerro Solo deposit. Rock-chip channel sampling of shallow trenches excavated in radiometric anomalies returned interesting uranium grades. Of 23 samples taken from Quaternary small pebble conglomerates of the Cretaceous Los Adobes Formation, 21 returned values in the 100- 11,700 ppm U3O8 range over a true thickness of 0.45m to1.8m.
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Topography and bedding are relatively flat in the Condor area. Since these factors are conducive, in principle, to open cut mining, the conceptual target could be relatively low- grade.
18.2.2 Gato-Krugger Project
Target type: Structurally controlled uranium hosted in faults and adjacent flat-lying sandstones.
The Gato-Krugger tenements, Mega’s southernmost ground holdings in Chubut Province, are located within a producing oilfield some 70km northwest of the port of Comodoro Rivadavia. Reconnaissance mapping and rock-chip sampling of Tertiary sedimentary units returned encouraging uranium values adjacent to major northwest- trending faults, the best result being 50cm at 1.9% U3O8. The target concept is that the faults provided a conduit for uranium-bearing oxidized fluids to migrate into relatively porous, reactive units where it may have precipitated in sub-horizontal strata.
18.2.3 Sierra Chata Project
Target type: Volcanic-hosted fracture-fill and disseminated uranium.
The Sierra Chata Project area was identified during field reconnaissance by Mega. Host rocks are rhyolites in which flow banding and local occurrences of spherulites are consistent with chilled margins typical of volcanic domes. Mineralization occurs in outcrop and pitting shows that it continues beneath shallow soils up to 50cm thick. Carnotite mineralization occurs as fracture-fillings with some dissemination up to 5cm from the fracture margins.
Reconnaissance field work is on-going in the Sierra Chata Project area.
18.2.4 Mirasol Project
Target type: Sandstone-hosted uranium in the Los Adobes Formation.
The Mirasol tenements were staked on the basis of radiometric anomalies delineated by CNEA’s airborne radiometric survey that was carried out in the 1970’s. Reconnaissance exploration outlined significant uranium mineralization in three 50cm to 2m thick horizons within a 20m thick portion of the Lower Chubut Group. Host rocks are tuffaceous sandstones and small pebble conglomerates that contain abundant carbonaceous material. Of an initial 46 rock-chip samples taken from widespread exposures of the mineralized horizons in gullies, 10 returned values > 200ppm U3O8, the best being 0.9m at 0.41% U3O8 and 1m at 0.12% U3O8. Based on the gully exposures, the prospective stratigraphy hosting the mineralized horizons was interpreted to occur to the south under approximately 35m of younger, barren sedimentary strata.
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A program of 19 vertical RC holes (total 2,036m) in an 80km2 area in the southern part of the Mirasol tenements was drilled in 2008 to investigate the uranium potential of two sandstone units of the Los Adobes Formation, the host of the Cerro Solo deposit.
Of the 14 holes drilled initially, one hole, DMS-05 intersected 3.9m at 380ppm eU3O8 from 38m depth. The other holes cut anomalous, but economically insignificant, uranium values. Five additional holes were then drilled around bore hole DMS-05 at a 400m spacing between holes. Of these, Hole DMS-15 intersected 1.8m at 380ppm eU3O8 and 620ppm Mo at 35.7m depth within the same layer of sandstones, 400m east of DMS-05. Mineralization remains open to the southeast.
18.2.5 Sierra Cuadrada Project
Target type: Sandstone-hosted uranium in the Los Adobes Formation
The Sierra Cuadrada tenements, located 5km to 40km northwest of the CNEA’s Sierra Cuadrada uranium deposit, contain outcrops of uraniferous volcaniclastic sediments in the lower part of the Chubut Group. Uranium occurs as disseminations within widely scattered, fossilised tree trunks and also within the enclosing volcaniclastic sandstones. The trunks are up to one metre in diameter and reach up to 10m in length.
Mega’s mapping, sampling and ground radiometrics delineated significant uranium mineralization in 0.5m to 1.5m thick, discontinuous lenses at two stratigraphic levels within a 20m to 30m thick sequence of volcaniclastic rocks. Of a total of 217 samples taken from outcrops in gullies in a 8km (east-west) by 3km to 5km (north-south) area, 103 returned assay values greater than 100ppm U3O8 and 14 returned values >0.2% U3O8, with the highest being 1m at 0.6% U3O8 and 1m at 1.89% U3O8. However, as this mineralization is overlain by up to 100m of younger sediments over most of the property, the economic potential of the uranium occurrence is considered to be limited.
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Figure 18.1 Map of Argentina showing the location of Mega’s properties in relation to the Provincial boundaries.
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18.3 Mendoza Province
Target type: Sandstone-hosted uranium in the Permian.
In August 2005, Mega acquired 15 exploration tenements totalling 956km2 in the Sierra Pintada Uranium district in Mendoza Province, Argentina, some 30km west of the city of San Rafael. The tenements, listed in Appendix 1 and shown in Figure 18.2, cover numerous radiometric anomalies detected in airborne surveys conducted in 1960 and 1968 by the CNEA, and contain uranium occurrences located by that organization during its sporadic exploration activities in the area through to the mid-1980’s.
The Sierra Pintada deposit was discovered by the CNEA in 1968 by drill testing the most prominent radiometric anomaly identified in the airborne survey. Detailed drilling of the Sierra Pintada deposit between 1968 and 1974 delineated Argentina’s largest known uranium resource in the form of two shallow–dipping (generally 20-30o) peneconcordant lenses within feldspathic sandstones. At a 0.04% U3O8 cut-off grade, the upper ore body has an average thickness of 10m (maximum 30m) and an average grade of 0.12% U3O8. The lower ore body, 10m to 20m below, averages 5m in thickness with a grade of 0.09% U3O8. Uranium mineralization, which consists of pitchblende with subordinate brannerite and coffinite, occurs predominantly as disseminations within the sandstone and also in microfractures.
The deposit contained some 30mlb U3O8 with an average ore grade of 0.12% U3O8. CNEA started production from an open pit-heap leach operation at Sierra Pintada in 1974, and produced some 3.5mlb U3O8 from 2.2 million tonnes of ore at an average grade of 0.11% U3O8, in the first 13 years of operation. The mine is reported to have produced approximately five million pounds of U3O8 before it closed in 1997 due to the low uranium price. The CNEA was preparing for the resumption of mining and processing at Sierra Pintada in 2010, but project development is currently stalled due to local opposition on environmental grounds.
The Sierra Pintada Uranium District contains widespread uranium mineralization in veinlets in volcanic and sedimentary rocks of the Triassic Carrizalito Group and while the stratabound ore bodies at the mine are located at two separate stratigraphic levels of the Los Reyunos Formation of the Permian Cochico Group.
One of Mega’s tenements covers prospective stratigraphy with untested radiometric anomalies adjacent to, and north of, CNEA’s claims that cover the Sierra Pintada mine. The other tenements cover uranium targets selected by Mega on the basis of radiometric anomalies, uranium occurrences and prospective stratigraphy. As the bulk of CNEA’s exploration of the district was focused on the Sierra Pintada deposit and its immediate environs, Mega’s main targets were staked on the premise that these areas were inadequately investigated in the CNEA’s exploration programs.
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18.4 Salta and Catamarca Provinces
Target-type: Volcanic-associated uranium.
Exploration concessions were staked in the Salta and Catamarca provinces on the basis of radiometric anomalies associated with Plio-Pleistocene ignimbrites related to the Cerro Galan volcanic complex. The only work undertaken on these properties to date has been reconnaissance radiometric surveys to confirm the presence of radioactivity in the area.
18.5 San Luis Province
18.5.1 Concaran Concessions
Target-type: Surficial uranium.
Mega’s Concaran properties in San Luis Province cover a prospect that was identified by CNEA in which reconnaissance exploration identified caliche-related uranium in sediments of Quaternary age. Samples from pits dug into the sediment returned values 2 of 200-500ppm U3O8 over an area of approximately 2km . The continuity of mineralization remains to be tested.
18.5.2 San Martin Concessions
Target-type: Uranium hosted in veins.
The San Martin tenements cover Precambrian metamorphic rocks and Palaeozoic granites containing vein-style uranium mineralization associated with fluorite. Mega has only conducted reconnaissance ground inspection of the San Martin tenements to date.
18.6 Santa Cruz Province
Target-type: Surficial uranium.
Mega’s four concessions in Santa Cruz Province cover extensive radiometric anomalies in Quaternary sediments. Field work conducted to date has included verification of some of the radiometric anomalies and grab-samples have returned values of up to 300ppm U3O8.
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Figure 18.2 Map of the Sierra Pintada uranium district showing the location of CNEA’s Sierra Pintada deposit, uranium occurrences and the location of Mega’s tenements.
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19 Interpretation and Conclusions
19.1 Current Project Ranking for Funding
Exploration projects in Argentina are currently ranked in the order shown below on technical merit. As exploration progresses on the various fronts outlined in this report, the ranking and expenditure requirements are likely to evolve on completion of each logical step in exploration of the properties. It is the intention of U3O8 Corp., on completion of the proposed transaction with Mega, to re-evaluate its projects on an on- going basis to ensure that funds are focused on the properties considered to be the most prospective in the light of new targets flowing in from reconnaissance exploration, balanced against the results obtained from more advanced targets. In the view of the authors, the current project ranking is as follows: 1. Laguna Salada. Target: surficial uranium. Extensive and consistent caliche-type uranium mineralization identified within 3m of surface. Of Mega’s properties in Argentina, this is the one that is closest to resource estimation. Exploration funding should flow to this project to advance it to resource estimation as soon as possible. It is located in Chubut Province where an open pit mining ban is currently in place. 2. Cerro Solo East. Target: sandstone-hosted uranium at depth. Adjacent to a resource delineated by the CNEA. Mega’s scout drilling has intersected significant uranium grades in 3 of 37 RC holes that constituted a scout-drilling campaign. A combination of IP, sedimentary facies distribution, structural interpretation and structural mapping provide the most appropriate exploration tools for this area. Located in Chubut province where an open pit mining ban is currently in place. 3. Condor. Target: sandstone-hosted uranium. Anomalous U3O8 grades encountered in rock-chip samples from the same stratigraphic unit that hosts the Cerro Solo deposit. 4. Gato-Krugger. Target: structurally controlled and sandstone-hosted uranium. Anomalous uranium grades encountered in rock-chip samples adjacent to faults. 5. Sierra Pintada district. Target: sandstone-hosted uranium. Mega’s mineral concessions abut against the State’s Sierra Pintada uranium mine, which hosts Argentina’s largest uranium deposit. Numerous uranium occurrences are located on Mega’s concessions that are located in the vicinity of the deposit. However, the project is located in Mendoza Province which has a mining ban in effect. The mining ban in Mendoza is considered to be of a longer-term nature than that of Chubut Province. Hence, no further exploration is planned on this project in the short-term despite its technical merit.
19.2 Laguna Salada Project
The Laguna Salada Project hosts uranium mineralization (principally carnotite) in two principal zones within an area that is approximately 30km2 in extent. Uranium occurs in two layers with unconsolidated sandy gravel: the upper zone occurs from surface to a depth of approximately 3m, forming a layer of mineralization from 50cm to 1.5m thick. A second layer of mineralization 30cm to 60cm metres thick, occurs 3m to 5m below surface. The principal mineralized areas have been extensively investigated through the
69 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 excavation of 726 trenches on a nominal 200m square grid. The trenches have undergone continuous channel sampling.
Exploration in the Laguna Salada Project has been successful in establishing that uranium mineralization occurs over extensive parts of an unconsolidated sandy gravel unit and merits further exploration. The sampling appears to be representative since it was done with a mechanised backhoe which effectively eliminates inadvertent oversampling of more richly mineralized layers. Points that require attention in further sampling on the Project are: Sampling of clusters of closely-spaced, and possibly intersecting trenches to establish the variability of grade and thickness of the mineralized unit in detail in order to provide constraints on the most appropriate method of resource estimation; Duplicate sampling to establish the inherent variability of grade between samples from the same site; and Establish the density of the gravel through measurements made at regular intervals.
In addition, QAQC procedures for the next phases of exploration need to be more stringent than those applied in the past. QAQC procedures should involve field duplicate samples, lab duplicate samples, field blanks, laboratory duplicates and certified standards must be inserted at an appropriate frequency immediately prior to assay of sample pulps.
19.3 Cerro Solo East Project
Mega has drilled 37 RC bore holes for a total of 3,086m in two campaigns, targeting areas of interest identified from rock-chip sampling and a seismic reflection survey designed to define the depth and structure of the target unit. Three bore holes in this drill campaign cut significant mineralization as follows: RCU-03, collared 4km northeast of Cerro Solo, intersected 2m at 0.11% U3O8 from 87m depth, while Hole RCU-09, some 4km southeast of Cerro Solo, intersected 1.0m at 0.21% U3O8 from 56m depth and Hole RCU-07 intersected 2m at 0.02% U3O8.
The target in the Cerro Solo Project is sandstone-hosted uranium mineralization at a depth of 55m to 130m below surface. Due to the apparent absence of impermeable units sandwiching the mineralized sandstone in the Cretaceous Los Adobes Formation, it is considered unlikely that in situ leaching would be an effective means of mining in the Cerro Solo East Project area. Hence, the target is relatively high-grade uranium that would support the costs associated with underground mining.
Mineralization in the Cerro Solo deposit and potentially economic uranium grades in two bore holes drilled by Mega have several common features that are distinct from barren areas: Uranium mineralization is associated with disseminated pyrite in the host sandstone; Mineralization is associated with channel facies in the sandstone – a unit which has a defined distribution in the Cerro Solo district; and Known mineralization occurs near faults.
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19.4 Condor Project
Condor is an early-stage project in which the target is outcropping sandstone-hosted uranium. Stratigraphy is shallow-dipping and hence an open pit mining scenario could be envisaged if extensive mineralization is found in the Condor area. Maga’s follow-up of regional airborne radiometric anomalies resulted in the discovery of interesting uranium grades in channel samples from shallow trenches: 21 samples had values of in the range of 0.01% to 1.1% U3O8 over true thicknesses of 45cm to 1.8m in the Condor Project area.
Although Condor is an early-stage project, the relatively high uranium grades encountered in some trenches and pits, and its open pit potential, is the reason that this project is prioritized for further exploration.
19.5 Gato-Krugger Project
The target at Gato-Krugger is structurally-controlled uranium hosted in faults and extending laterally into more permeable or chemically reactive beds of the Tertiary stratigraphy. The best result from reconnaissance rock-chip sampling was 0.5m at 1.9% U3O8. The most efficient means of testing the potential of this area is by scout drilling the structures to determine the extent to which they are mineralized and altered, and also to cut a significant part of the flat-lying stratigraphy – a potential host for mineralization – that does not outcrop at surface. Access to the area is very good and scout drilling can be done relatively efficiently. Negative assay results from scout drilling into these apparently fertile structures would severely downgrade the project.
19.6 Reconnaissance of Other Properties
A group of properties that has obvious potential are those located in the Sierra Pintada district, host to Argentina’s largest known uranium deposit. However, the Sierra Pintada district lies in Mendoza Province in which the mining ban is considered to be of a longer- term nature than the one in Chubut Province. Hence, no significant work is planned for properties in Mendoza Province in 2010, despite their potential.
Mega’s exploration concessions in other areas and provinces of Argentina are grassroots prospects that require quick and efficient evaluation as to their prospectivity. This is done by a motivated, highly mobile team that ground-truths regional radiometric anomalies or uranium occurrences and provides feedback as to whether a concession should be maintained or not. If a recommendation is made that a concession be maintained, the team provides guidance as to the type of follow-up exploration that is required.
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20 Recommendations
20.1 Laguna Salada Project
The next phase of exploration (Phase I) on the Laguna Salada Project involves preparation for resource estimation. Phase II, the resource estimate itself, is contingent upon successful completion of Phase I. Due to the unconsolidated nature of the sandy gravel, trench walls are unstable and trenches were filled immediately after sampling. Hence, the independent qualified person undertaking the resource estimate would need to determine where he requires new trenches to be excavated to enable him to verify the grade, continuity and characteristics of mineralization within the defined mineralized zones. The independent QP would be responsible for ensuring that extensive check sampling is undertaken under his supervision and that it is independently submitted for assay within a QAQC protocol established and controlled by him. Additional trenching and sampling is the largest item in Phase I of the proposed budget for the Laguna Salada Project for 2010 (Table 20.1). Metallurgical testing should commence early in Phase I so that the test results are available prior to conclusion of the resource estimate and can be included in that technical report.
The $300,000 Phase I exploration budget that is recommended for the Laguna Salada Project is dedicated to preparing the project for resource estimation (Table 20.1). It is envisaged that the resource estimate, which constitutes Phase II of the proposed program, would be completed in the latter part of 2010 and would carry the project to the next logical decision node for the project.
Table 20.1 Proposed Budget for the Laguna Salada Project
Estimated Item cost (C$) Phase I – Exploration General, administration & salaries $90,000 Concession fees & land payments $20,000 Basic exploration, geological mapping, reconnaissance
sampling, assay Geophysics Trenching & associated assay $130,000 Drilling & associated assay Metallurgical tests $60,000 Subtotal Phase I $300,000 Phase II - Resource estimation $100,000 TOTAL $400,000
20.2 Cerro Solo East
The next phase of exploration should focus on the distribution of pyrite, faults and the favourable channel facies of the Los Adobes sandstone. Induced Polarization surveys are recommended in areas where mapped structures cut sedimentary channel
72 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 sandstone facies. The IP provides a means of detecting anomalies that could be generated by disseminated pyrite in these priority target areas. Drilling should only be undertaken if compelling IP targets are identified, and would constitute part of the next budget for the Cerro Solo East Project. When drilling is undertaken, diamond drilling should be used as opposed to RC so that the geological features and context of mineralization can be observed. Reverse Circulation drilling could be used at a later stage when and if infill drilling is required. The proposed budget for the Cerro Solo East Project is shown in Table 20.2.
Significant differences between assay values and equivalent U3O8 grade estimates form a down-hole probe need to be investigated as a priority. The first part of this verification process should involve the reanalysis of the pulps of RC drill samples, from intervals in which significant gamma values were recorded by the probe, with certified standards inserted into the sample stream at an appropriate frequency. The second part of this investigation involves core drilling so that the nature and distribution of the mineralization within the rock can be observed to determine to what extent a nugget effect is responsible for the differences in grade recorded by the two methods. The core should be split and assayed. The assay values of the mineralized intervals should then be compared against the grade estimated from the down-hole gamma probe using the same procedure as was used in the RC holes. Observation of the core from intervals in which discrepancies in the values persists may provide a means of identifying the causative factors.
Table 20.2 Proposed Budget for the Cerro Solo East Project.
Estimated Item cost (C$) General, administration & salaries $70,000 Concession fees & land payments $20,000 Basic exploration, geological mapping, reconnaissance sampling, $20,000 assay Geophysics (IP) $110,000 Trenching & associated assay Drilling & associated assay Metallurgical tests Resource estimation TOTAL $220,000
20.3 Condor Project
It is recommended that exploration on the Condor Project should focus on mapping of the extent of the channel facies and alteration within that unit, complemented by extensive rock-chip sampling and more extensive trenching with a mechanized excavator in the areas that have been found to be anomalous in uranium and pathfinder elements.
The budget for the Condor Project is orientated towards field work and trenching, which is deemed to be the most efficient means of exploring the project (Table 20.3). This field work is relatively inexpensive. No drilling or IP geophysics is budgeted for the project at
73 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010 this time, but it would be considered in the next phase of exploration if assay results from trenches and rock-chip sampling of outcrops indicate that the target has significant potential for uranium mineralization.
Table 20.3 Proposed Budget for the Condor Project.
Estimated Item cost (C$) General, administration & salaries $30,000 Concession fees & land payments $5,000 Basic exploration, geological mapping, reconnaissance sampling, $20,000 assay Geophysics Trenching & associated assay $20,000 Drilling & associated assay Metallurgical tests Resource estimation TOTAL $75,000
20.4 Gato Krugger Project
The recommended exploration program for Gato-Krugger is drilling of the structures with which uranium mineralization is observed to be associated in the field. The target concept is that a significant component of any uranium mineralization associated with these steep-dipping faults will be sub-horizontal, with mineralization being startiform within specific stratigraphic units. Hence, trenching at surface is not an effective means of exploration. Drilling provides the most efficient means of cutting flat-lying stratigraphy adjacent to these faults. Note that, although the potential of Gato-Krugger Project is considered to be lower than that of the Condor Project, Gato-Krugger has a higher exploration budget as a result of the drilling recommended (Table 20.4). The infrastructure of the project area is outstanding with a dense road network, which makes the deployment of an RC rig that much more efficient. It is recommended that 1,200m of RC drilling be undertaken in 8 bore holes. Reverse Circulation drilling is recommended because it is cheaper than diamond drilling and the target horizons should be quite extensive and controls on mineralization are likely to be adequately defined in the drill chips.
20.5 Reconnaissance Exploration
The budget for reconnaissance exploration (Table 20.5) consists mainly of funds for quick and efficient field review of Mega’s existing concession areas and the search for more prospective targets and opportunities. Once clear uranium mineralization potential has been identified during this reconnaissance phase of some 30 concessions, consideration will be given to establishing dedicated budgets for some of these new target areas in 2011.
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Table 20.4 Proposed Budget for the Gato-Krugger Project.
Estimated Item cost (C$) General, administration & salaries $30,000 Concession fees & land payments $5,000 Basic exploration, geological mapping, reconnaissance sampling,
assay Geophysics Trenching & associated assay Drilling & associated assay $70,000 Metallurgical tests Resource estimation TOTAL $105,000
Table 20.5 Proposed Budget for Reconnaissance Exploration.
Estimated Item cost (C$) General, administration & salaries $60,000 Concession fees & land payments $50,000 Basic exploration, geological mapping, reconnaissance sampling, $90,000 assay Geophysics Trenching & associated assay Drilling & associated assay Metallurgical tests Resource estimation TOTAL $200,000
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20.6 Budget Summary
A summary of the budget required to advance each of the above projects to the next decision node is provided in Table 20.6 below.
Table 20.6 Summary of the proposed budget for Mega’s properties in Argentina.
Project Laguna Cerro Condor Gato- Total Item Reconnaissance Salada Solo Krugger Exploration East Phase I - Exploration G &A $90,000 $70,000 $30,000 $30,000 $60,000 $280,000 Land fees $20,000 $20,000 $5,000 $5,000 $50,000 $100,000 Basic $90,000 $20,000 $20,000 $130,000 exploration Geophysics $110,000 $110,000 Trenching $130,000 $20,000 $150,000 Drilling $70,000 $70,000 Metallurgy $60,000 $60,000 Subtotal Phase I - Exploration $900,000 Phase II Resource $100,000 $100,000 estimation TOTAL $400,000 $220,000 $75,000 $105,000 $200,000 $1,000,000
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21 References
Comisión Nacional de Energía Atómica. 1997. Cerro Solo, Paso de los Indios, Provincia del Chubut, Republica Argentina. A summary of the pre-feasibility study carried out by the CNEA on the Cerro Solo uranium deposit (unpublished).
Kyser, K. & Cuney, M. 2009. Sandstone-hosted uranium deposits. In: Recent and not- so-recent developments in uranium deposits and implications for exploration (M. Cuney & K. Kyser (eds). Mineral Association of Canada Short Course Vol 39, 221-240.
SRK, 2007. Uranium Project Desktop Review, Chubut Province, Argentina. A report for Argentina Power Mining Corporation by G. Even, SRK Consulting (unpublished).
Thomas, D., Zaluski, G., Brisbin, D. & Drever, G. 2007. Uranium deposit types: within the context of 2007 North American Exploration activity. Mineral Deposit Division of the Geological Association of Canada 2007 Howard Street Robinson Lecture Tour. Geological Association of Canada, Mineral deposits Division. Unpublished.
World Nuclear Association, 2009. Uranium Deposit Types. www.world-nuclear.org.
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22 Date and Signature Page
Richard M. Spencer P.Geo, PhD
Richard Cleath M.Sc
March 23, 2010
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23 Appendices
23.1 Appendix 1
23.1.1 Appendix 1A: Details of Mega’s mineral concessions in Chubut Province, Argentina.
Date of Province Project Concession Name Reference No Owner Type Size (Ha) Application Galan Sur 1 148-07 Maple Cateo 10-May-07 9,926.0 Galan Sur 2 149-07 Maple Cateo 10-May-07 9,969.0 Catamarca Cenizas 150-07 Maple Cateo 10-May-07 9,906.6 La Hoyada 147/07 Maple Cateo 10-May-07 7,697.0 Subtotal Catamarca Province 4 37,498.6 Condor 1 14.556/05 Maple Cateo 15-Apr-05 5,692.0 Cerro Condor Pichiñan 15.080/06 RIOBO Cateo 21-Sep-06 2,420.0 Subtotal Cerro Condor 2 8,112.0 Cerro Leon 1 15.212/07 RIOBO Cateo 12-May-07 6,454.0 Cerro Leon 2 15.213/07 RIOBO Cateo 12-May-07 10,000.0 Cerro Leon 3 15.214/07 RIOBO Cateo 12-May-07 9,804.0 Cerro Leon Cerro Leon 4 15.215/07 RIOBO Cateo 12-May-07 6,770.0 Cerro Leon 5 15.216/07 RIOBO Cateo 12-May-07 5,004.0 Subtotal Cerro Leon 5 38,032.0 Condor 2 14.557/05 Maple Cateo 15-Apr-05 3,908.0 Condor 3 14.558/05 Maple Cateo 15-Apr-05 3,498.0 Puntero 15.299/07 FENIX Cateo 17-Sep-07 239.0 El Boliche 15.186/07 MEGA MD 14-Mar-07 3,498.0 Arroyo Perdido N 1 15.187/07 MEGA MD 14-Mar-07 928.0 Arroyo Perdido N 2 15.188/07 MEGA MD 14-Mar-07 324.0 Chubut Cerro Solo East Arroyo Perdido N 3 15.189/07 MEGA MD 14-Mar-07 2,435.0 A°Perdido Norte 4 15428/08 MEGA MD 14-Apr-08 2,853.0 A°Perdido Norte 5 15571/09 MEGA MD 27-May-09 2,923.0 Arroyo Perdido 15427/08 MEGA MD 14-Apr-08 3,300.0 Arroyo Perdido Sur 2 15572/09 MEGA MD 27-May-09 2,111.0 Arroyo Perdido Sur 3 15573/09 MEGA MD 27-May-09 786.0 Subtotal Cerro Solo East 12 26,803.0 Gato 1 15.095/06 RIOBO Cateo 20-Oct-06 10,000.0 Tacho 1 15366/08 FENIX Cateo 20-Feb-08 10,000.0 Tacho 2 15367/08 FENIX Cateo 20-Feb-08 10,000.0 Gato-Krugger Tacho 3 15368/08 FENIX Cateo 20-Feb-08 10,000.0 Tacho 4 15369/08 FENIX Cateo 20-Feb-08 9,960.0 Cerro Negro 15535/08 FENIX Cateo 30-Dec-08 9,998.0 Subtotal Gato-Krugger 6 59,958.0 Sombrero I 14.576/05 Maple Cateo 20-Apr-05 5,809.0 Laguna Colorada Subtotal Laguna Colorada 1 5,809.0
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Appendix 1A Continued: Details of Mega’s mineral concessions in Chubut Province, Argentina.
Date of Province Project Concession Name Reference No Owner Type Size (Ha) Application Laguna Salada II 14.624/05 Maple Cateo 20-Sep-05 2,023.0 Laguna Salada III 14.625/05 Maple Cateo 30-May-05 3,952.0 Laguna Salada IV 14.626/05 Maple Cateo 30-May-05 3,684.0 Hope 1 15.280/07 RIOBO Cateo 3-Sep-07 10,000.0 Hope 2 15.281/07 RIOBO Cateo 3-Sep-07 9,984.0 Hope 3 15.282/07 RIOBO Cateo 3-Sep-07 9,985.0 Hope 4 15.283/07 RIOBO Cateo 3-Sep-07 9,372.0 Hope 5 15.284/07 RIOBO Cateo 3-Sep-07 9,878.0 Lago Seco 15.222/07 RIOBO Cateo 28-May-07 3,442.0 Laguna Salada Lago Seco 2 15.229/07 RIOBO Cateo 15-Jun-07 9,998.0 Lago Seco Oeste 15576/09 FENIX Cateo 4-Jun-09 9,276.0 Lago Seco Sur 15623/09 FENIX MD 30-Jul-09 991.0 Guanaco 15313/07 Maple MD 5-Oct-07 6,998.0 GUANACO I 15496/07 Maple MD 10-Sep-07 4,009.0 GUANACO II 15497/07 Maple MD 10-Sep-07 4,009.0 GUANACO III 15498/07 Maple MD 10-Sep-07 4,009.0 GUANACO IV 15657/09 Maple MD 6-Oct-09 3,194.0 Subtotal Laguna Salada 17 104,804.0 Mirasol I 14.569/05 Maple Cateo 20-Apr-05 3,150.0 Mirasol II 14.570/05 Maple Cateo 20-Apr-05 9,999.0 Mirasol III 14.571/05 Maple Cateo 20-Apr-05 9,488.0 Mirasol Mirasol IV 14.572/05 Maple Cateo 20-Apr-05 6,413.0 Mirasol I 15347/07 Maple MD 12-Dec-07 6,840.0 Subtotal Mirasol 5 35,890.0 Sierra Mora I 14.564/05 Maple Cateo 20-Apr-05 3,739.0 Sierra Mora II 14.565/05 Maple Cateo 20-Apr-05 8,043.0 Chubut Sierra Mora III 14.566/05 Maple Cateo 20-Apr-05 9,999.0 Sierra Mora IV 14.567/05 Maple Cateo 20-Apr-05 9,999.0 Sierra Mora V 14568/05 Maple Cateo 20-Apr-05 8,574.0 Sierra Cuadrada Terraza I 14.818/06 Maple Cateo 7-Feb-06 10,000.0 Terraza II 14.819/06 Maple Cateo 7-Feb-06 10,000.0 Terraza III 14.820/06 Maple Cateo 7-Feb-06 10,000.0 Sierra Mora 1 15.352/07 Maple MD 20-Dec-07 5,209.0 Subtotal Sierra Cuadrada 6 75,563.0 Bajo 1 15.075/06 RIOBO Cateo 15-Sep-06 9,840.0 Bajo 2 15.076/06 RIOBO Cateo 15-Sep-06 9,972.0 Bajo Colorado Bajo 3 15.077/06 RIOBO Cateo 15-Sep-06 9,969.0 Bajo 4 15.078/06 RIOBO Cateo 15-Sep-06 9,934.0 Subtotal Bajo Colorado 4 39,715.0 Sierra Chata 15.079/06 RIOBO Cateo 19-Sep-06 9,905.0 Chata Sur 15622/09 FENIX Cateo 30-Jul-09 1,655.0 Chato 15650/09 FENIX Cateo 1-Oct-09 10,000.0 Chatito 15651/09 FENIX Cateo 1-Oct-09 8,729.0 Sierra Chata Chatón 15652/09 FENIX Cateo 1-Oct-09 10,000.0 Chata Sureste 15658/09 FENIX Cateo 21-Oct-09 6,957.0 Chichón 2 15692/10 FENIX Cateo 11-Feb-10 3,812.0 Subtotal Sierra Chata 7 51,058.0 Bajo Gualicho 1 15.091/06 RIOBO Cateo 9-Oct-06 9,946.0 Bajo Del Gualicho Subtotal Bajo Del Gualicho 1 9,946.0 Subtotal Cateos Chubut Province 57 438,771.6 Subtotal MD's Chubut Province 16 46,428.0 Subtotal Chubut Province 73 485,199.6
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23.1.2 Appendix 1B: Details of Mega’s mineral concessions in the Catamarca, Mendoza, Salta, San Luis and Santa Cruz provinces, Argentina.
Date of Province Concession Name Reference No Owner Type Size (Ha) application Galan Sur 1 148-07 Maple Cateo 10-May-07 9,926.0 Galan Sur 2 149-07 Maple Cateo 10-May-07 9,969.0 Catamarca Cenizas 150-07 Maple Cateo 10-May-07 9,906.6 La Hoyada 147/07 Maple Cateo 10-May-07 7,697.0 Subtotal Catamarca Province 4 37,498.6 Los Mesones 2 2900-M-05 Maple Cateo 4-May-09 6,980.0 Los Mesones 3 2901-M-05 Maple Cateo 18-Jul-08 9,903.0 Los Mesones 5 2902-M-05 Maple Cateo 19-Jul-08 3,186.0 Los Mesones 4 2903-M-05 Maple Cateo 10-Oct-08 8,043.0 Diamante Sur 2904-M-05 Maple Cateo 11-Oct-08 8,407.0 Carrizalito 2905-M-05 Maple Cateo 12-Oct-08 3,045.0 Los Mesones 2906-M-05 Maple Cateo 18-Jul-08 7,340.0 Los Reyunos 1 2909-M-05 Maple Cateo 19-Jul-08 9,910.0 Mendoza Los Reyunos 2 2919-M-05 Maple Cateo 20-Jul-08 7,752.0 Punta de Agua 2920-M-05 Maple Cateo 21-Jul-08 1,327.0 Las Peñas 1 2921-M-05 Maple Cateo 7-Aug-09 9,100.0 Las Peñas 2 2922-M-05 Maple Cateo 7-Aug-09 9,696.0 Cuchillas Blancas 2923_M-05 Maple Cateo 7-Apr-09 4,804.0 Piquilinal 2924-M-05 Maple Cateo 8-Apr-09 9,388.0 Lomas Negras 2925-M-05 Maple Cateo 7-May-09 5,950.0 Subtotal Mendoza Province 15 104,831.0 GALAN ESTE I 19,582 Maple MD 25-Mar-09 2,025.0 GALAN ESTE II 19,583 Maple MD 25-Mar-09 2,025.0 GALAN ESTE III 19,584 Maple MD 25-Mar-09 4,225.0 Salta GALAN ESTE I 18.772 Maple Cateo 5-Oct-07 3,375.0 GALAN ESTE II 18.773 Maple Cateo 5-Oct-07 3,490.0 GALAN ESTE III 18.774 Maple Cateo 5-Oct-07 5,393.0 Subtotal Salta Province 6 20,533.0 Concaran 1 773-B-2007 Maple Cateo 29-Jun-07 9,016.0 San Martin 1 775-B-2007 Maple Cateo 29-Jun-07 9,962.0 San Luis San Martin 2 774-B-2007 Maple Cateo 29-Jun-07 9,974.0 Subtotal San Luis Province 3 28,952.0 Alberto 424149/M/009 Maple Cateo 24-Feb-09 9,839.3 Alberto 1 424222/M/009 Maple Cateo 25-Feb-09 5,300.0 Santa Cruz Picaso I 425585/M/009 Maple Cateo 8-Apr-09 9,900.0 Picaso II 425586/M/009 Maple Cateo 8-Apr-08 9,900.0 Subtotal Santa Cruz Province 4 34,939.3
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23.2 Appendix 2: Coordinates of Mega’s mineral concessions in Argentina listed by province.
23.2.1 Appendix 2A: Coordinates (in UTM) of Mega’s mineral concessions in Catamarca Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 3,386,370 7,159,283 3,396,413 7,159,283 CATEO LA HOYADA 147M2007 7,697 3,396,413 7,151,619 3,386,370 7,151,619 3,361,600 7,127,390 3,373,000 7,127,390 CATEO CENIZAS 150M2007 9,907 3,373,000 7,118,700 3,361,600 7,118,700 3,414,639 7,109,038 3,414,639 7,099,738 3,414,520 7,099,738 3,414,520 7,099,789 CATEO GALAN SUR 1 148M2007 9,926 3,409,520 7,099,789 3,409,520 7,099,738 3,403,938 7,099,738 3,403,939 7,109,038 3,403,939 7,109,038 3,403,938 7,099,738 3,393,239 7,099,738 CATEO GALAN SUR 2 149M2007 9,969 3,393,239 7,107,183 3,394,673 7,107,206 3,394,631 7,109,038
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23.2.2 Appendix 2B: Coordinates (in UTM) of Mega’s mineral concessions in Chubut Province, Argentina: Bajo Colorado, Bajo Del Gualicho and Sierra Chata projects. Co-ordinate system, projection Application Project Type Concession Name Surface (Ha) POSGAR-WGS84-ARG_66W Reference Nº X Y 3,438,101 5,272,303 3,448,379 5,272,303 CATEO BAJO 1 15075/06 9,840 3,448,379 5,262,729 3,438,101 5,262,729 3,448,393 5,270,817 3,458,360 5,270,817 CATEO BAJO 2 15076/06 9,972 3,458,360 5,260,812 BAJO 3,448,393 5,260,812 COLORADO 3,438,101 5,262,729 3,448,379 5,262,729 CATEO BAJO 3 15077/06 9,969 3,448,379 5,253,028 3,438,101 5,253,028 3,448,393 5,260,812 3,458,360 5,260,812 CATEO BAJO 4 15078/06 9,934 3,458,360 5,250,845 3,448,393 5,250,845 3,557,742 5,306,708 3,558,817 5,306,708 BAJO DEL 3,558,817 5,313,021 CATEO BAJO GUALICHO 1 15091/06 9,946 GUALICHO 3,564,153 5,313,021 3,564,153 5,296,449 3,557,742 5,296,449 3,489,920 5,264,133 3,494,880 5,264,133 3,494,880 5,261,205 CATEO CHATA SUR 15622/09 1,655 3,496,400 5,261,205 3,496,400 5,266,000 3,489,920 5,266,000 3,502,982 5,261,000 3,502,982 5,263,529 3,505,116 5,263,529 3,505,116 5,257,000 CATEO CHATA SURESTE 15658/09 6,957 3,499,800 5,257,000 3,499,800 5,248,336 3,496,400 5,248,336 3,496,400 5,261,000 3,468,360 5,261,794 3,476,320 5,261,794 CATEO CHATITO 15651/09 8,729 3,476,320 5,250,817 3,468,360 5,250,817 3,476,320 5,261,794 3,486,320 5,261,794 SIERRA CHATA CATEO CHATO 15650/09 10,000 3,486,320 5,251,794 3,476,320 5,251,794 3,458,360 5,260,817 3,468,360 5,260,817 CATEO CHATON 15652/09 10,000 3,468,360 5,250,817 3,458,360 5,250,817 3,489,920 5,271,064 3,502,982 5,271,064 3,502,982 5,261,000 CATEO SIERRA CHATA 15079/06 9,905 3,496,400 5,261,000 3,496,400 5,266,001 3,489,920 5,266,001 3,486,320 5,261,794 3,489,920 5,261,794 3,489,920 5,264,133 3,494,880 5,264,133 CATEO CHICHON 2 15692/10 3,812 3,494,880 5,261,205 3,496,400 5,261,205 3,496,400 5,259,074 3,486,320 5,259,074
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Appendix 2B continued: Coordinates (in UTM) of Mega’s mineral concessions, Chubut Province, Argentina: Laguna Salada Project.
Co-ordinate system, projection Application Project Type Concession Name Surface (Ha) POSGAR-WGS84-ARG_66W Reference Nº X Y 3,407,781 5,106,278 3,417,781 5,106,278 CATEO HOPE 1 15280/07 10,000 3,417,781 5,096,278 3,407,781 5,096,278 3,422,308 5,106,278 3,422,308 5,096,278 3,423,728 5,096,278 3,423,728 5,089,376 CATEO HOPE 2 15281/07 9,984 3,415,820 5,089,376 3,415,820 5,096,278 3,417,781 5,096,278 3,417,781 5,106,278 3,423,728 5,089,376 3,423,728 5,086,555 3,418,892 5,086,555 3,418,892 5,077,653 CATEO HOPE 3 15282/07 9,985 3,410,181 5,077,653 3,410,181 5,086,555 3,415,820 5,086,555 3,415,820 5,089,376 3,404,447 5,080,580 3,404,447 5,081,184 3,410,181 5,081,184 3,410,181 5,077,653 CATEO HOPE 4 15283/07 9,372 3,418,892 5,077,653 3,418,892 5,075,097 3,397,781 5,075,097 3,397,781 5,080,580 3,408,651 5,075,097 3,417,272 5,075,097 CATEO HOPE 5 15284/07 9,878 3,417,272 5,063,638 3,408,651 5,063,638 3,393,480 5,091,805 3,397,781 5,091,805 CATEO LAGO SECO 15222/07 3,442 3,397,781 5,083,801 3,393,480 5,083,801 3,415,820 5,096,276 3,415,820 5,086,580 3,410,181 5,086,580 3,410,181 5,081,184 3,404,462 5,081,184 CATEO LAGO SECO 2 15229/07 9,998 3,404,462 5,086,580 3,407,781 5,086,580 3,407,781 5,093,054 3,410,521 5,093,054 3,410,521 5,096,276 3,394,492 5,094,201 3,394,492 5,091,805 3,393,448 5,091,805 CATEO LAGO SECO OESTE 15576/09 9,276 LAGUNA 3,393,448 5,085,354 SALADA 3,383,245 5,085,354 3,383,245 5,094,201 3,391,263 5,104,084 3,391,263 5,106,557 3,399,332 5,106,557 CATEO LAGUNA SALADA II 14624/05 2,023 3,399,332 5,102,716 3,384,920 5,102,716 3,384,920 5,104,084 3,407,781 5,105,999 3,407,781 5,096,580 3,405,674 5,096,580 CATEO LAGUNA SALADA III 14625/05 3,952 3,405,674 5,102,901 3,399,332 5,102,901 3,399,332 5,105,999 3,397,781 5,090,259 3,407,781 5,090,259 CATEO LAGUNA SALADA IV 14626/05 3,684 3,407,781 5,086,580 3,397,781 5,086,580 3,393,480 5,085,350 3,393,480 5,083,801 3,397,780 5,083,801 3,397,780 5,076,400 CATEO LAGO SECO SUR 15623/09 991 3,393,377 5,076,400 3,393,377 5,078,300 3,383,850 5,078,300 3,383,850 5,085,350 3,376,256 5,118,589 3,384,622 5,118,589 MD GUANACO 15313/07 6,998 3,384,622 5,110,223 3,376,256 5,110,223 3,384,920 5,110,405 3,391,263 5,110,405 MD GUANACO I 15496/07 4,009 3,391,263 5,104,084 3,384,920 5,104,084 3,399,331 5,102,901 3,405,674 5,102,901 MD GUANACO II 15497/07 4,009 3,405,674 5,096,580 3,399,331 5,096,580 3,397,781 5,096,580 3,404,124 5,096,580 MD GUANACO III 15498/07 4,009 3,404,124 5,090,259 3,397,781 5,090,259 3,407,781 5,096,580 3,407,781 5,096,278 3,410,521 5,096,278 3,410,521 5,093,054 MD GUANACO IV 15657/07 3,194 3,407,781 5,093,054 3,407,781 5,090,259 3,404,124 5,090,259 3,404,124 5,096,580
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Appendix 2B continued: Coordinates (in UTM) of Mega’s mineral concessions in Chubut Province, Argentina: Gato-Krugger & Cerro Condor projects.
Co-ordinate system, projection Application Surface Project Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,577,560 4,980,020 2,577,560 4,966,010 2,570,330 4,966,010 CATEO CERRO NEGRO 15535/08 9,998 2,570,330 4,975,150 2,570,600 4,975,150 2,570,600 4,980,020 2,548,579 4,954,078 2,558,579 4,954,078 CATEO GATO 1 15095/06 10,000 2,558,579 4,944,078 2,548,579 4,944,078 2,550,600 4,985,150 2,560,600 4,985,150 CATEO TACHO 1 15366/08 10,000 2,560,600 4,975,150 2,550,600 4,975,150 2,560,600 4,985,150 GATO 2,570,600 4,985,150 CATEO TACHO 2 15367/08 10,000 KRUGGER 2,570,600 4,975,150 2,560,600 4,975,150 2,570,330 4,968,200 2,570,330 4,957,750 2,556,646 4,957,750 2,556,646 4,962,500 CATEO TACHO 3 15368/08 10,000 2,562,088 4,962,500 2,562,088 4,965,740 2,566,995 4,965,740 2,566,995 4,968,200 2,563,850 4,957,750 2,563,850 4,945,385 2,558,579 4,945,385 CATEO TACHO 4 15369/08 9,960 2,558,579 4,954,300 2,548,600 4,954,300 2,548,600 4,957,750 2,489,311 5,201,797 2,495,911 5,201,797 CATEO CONDOR 1 14556/05 5,692 2,495,911 5,193,172 2,489,311 5,193,172 CERRO CONDOR 2,495,911 5,201,797 2,499,911 5,201,797 CATEO PICHIÑAN 15080/06 2,420 2,499,911 5,195,797 2,495,911 5,195,797
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Appendix 2B continued: Coordinates (in UTM) of Mega’s mineral concessions in Chubut Province, Argentina: Cerro Leon, Laguna Colorada & Mirasol projects.
Co-ordinate system, projection Application Surface Project Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,587,000 5,174,530 2,587,000 5,166,850 2,581,530 5,166,850 CATEO CERRO LEON 1 15212/07 6,454 2,581,530 5,168,446 2,577,826 5,168,446 2,577,826 5,174,530 2,571,530 5,168,446 2,581,530 5,168,446 CATEO CERRO LEON 2 15213/07 10,000 2,581,530 5,158,446 2,571,530 5,158,446 2,581,530 5,166,850 CERRO LEON 2,592,422 5,166,850 CATEO CERRO LEON 3 15214/07 9,804 2,592,422 5,157,848 2,581,530 5,157,848 2,592,422 5,166,850 2,599,943 5,166,850 CATEO CERRO LEON 4 15215/07 6,770 2,599,943 5,157,848 2,592,422 5,157,848 2,597,000 5,181,000 2,600,537 5,181,000 CATEO CERRO LEON 5 15216/07 5,004 2,600,537 5,166,850 2,597,000 5,166,850 2,517,227 5,135,467 LAGUNA 2,524,927 5,135,467 CATEO SOMBRERO I 14576/05 5,809 COLORADA 2,524,927 5,127,767 2,517,227 5,127,767 2,610,129 5,218,047 2,610,129 5,209,247 2,609,230 5,209,247 2,609,230 5,211,828 CATEO MIRASOL I 14569/05 3,150 2,607,085 5,211,828 2,607,085 5,215,113 2,600,864 5,215,113 2,600,864 5,218,047 2,609,230 5,215,113 2,609,230 5,209,144 2,608,570 5,209,144 MD MIRASOL I 15347/07 6,840 2,608,570 5,206,747 2,600,864 5,206,747 2,600,864 5,215,113 MIRASOL 2,600,548 5,206,717 2,608,570 5,206,717 CATEO MIRASOL II 14570/05 9,999 2,608,570 5,194,252 2,600,548 5,194,252 2,608,570 5,209,144 2,618,910 5,209,144 CATEO MIRASOL III 14571/05 9,488 2,618,910 5,199,968 2,608,570 5,199,968 2,616,561 5,195,968 2,616,561 5,187,967 2,608,537 5,187,967 CATEO MIRASOL IV 14572/05 6,413 2,608,537 5,194,252 2,608,570 5,194,252 2,608,570 5,195,968
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Appendix 2B continued: Coordinates (in UTM) of Mega’s mineral concessions in Chubut Province, Argentina: Cerro Solo East Project.
Co-ordinate system, projection Application Surface Project Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,529,945 5,200,517 2,529,945 5,195,575 2,522,013 5,195,575 2,522,013 5,198,214 CATEO CONDOR 2 14557/05 3,908 2,522,069 5,198,214 2,522,069 5,200,214 2,522,019 5,200,214 2,522,019 5,200,517 2,531,012 5,195,575 2,531,012 5,194,087 2,533,012 5,194,087 2,533,012 5,195,576 2,536,020 5,195,576 2,536,020 5,188,971 CATEO CONDOR 3 14558/05 3,498 2,542,019 5,188,971 2,542,019 5,187,131 2,534,440 5,187,131 2,534,440 5,193,364 2,528,211 5,193,364 2,528,211 5,195,575 2,540,688 5,200,507 2,542,019 5,200,507 CATEO PUNTERO 15299/07 239 2,542,019 5,198,702 2,540,688 5,198,702 2,538,877 5,198,708 2,542,019 5,198,708 MD ARROYO PERDIDO NORTE 1 15187/07 928 2,542,020 5,195,581 2,538,877 5,195,581 2,538,883 5,200,507 2,540,688 5,200,507 MD ARROYO PERDIDO NORTE 2 15188/07 324 2,540,688 5,198,708 2,538,883 5,198,708 2,533,933 5,200,507 2,538,877 5,200,507 MD ARROYO PERDIDO NORTE 3 15189/07 2,435 2,538,877 5,195,581 2,533,933 5,195,581 2,536,020 5,195,576 2,536,020 5,191,576 2,540,020 5,191,576 CERRO SOLO 2,540,020 5,195,576 MD ARROYO PERDIDO 15427/08 3,300 EAST 2,542,020 5,195,576 2,542,020 5,188,576 2,535,019 5,188,576 2,535,019 5,195,576 2,531,012 5,195,576 2,531,012 5,194,087 2,533,012 5,194,087 2,533,012 5,195,576 2,535,019 5,195,576 MD ARROYO PERDIDO SUR 2 15572/09 2,111 2,535,019 5,188,576 2,536,577 5,188,576 2,536,577 5,187,210 2,528,211 5,187,210 2,528,211 5,195,576 2,542,020 5,188,576 2,542,019 5,187,131 2,536,477 5,187,131 MD ARROYO PERDIDO SUR 3 15573/09 786 2,536,477 5,187,210 2,536,577 5,187,210 2,536,577 5,188,576 2,533,933 5,200,517 2,533,933 5,195,581 2,533,012 5,195,581 2,533,012 5,196,087 MD ARROYO PERDIDO NORTE 4 15428/08 2,853 2,531,012 5,196,087 2,531,012 5,195,576 2,527,951 5,195,576 2,527,951 5,200,517 2,522,013 5,198,214 2,522,069 5,198,214 2,522,069 5,200,214 2,522,019 5,200,214 MD ARROYO PERDIDO NORTE 5 15571/09 2,923 2,522,019 5,200,517 2,527,951 5,200,517 2,527,951 5,195,575 2,522,013 5,195,575 2,528,525 5,193,364 2,534,440 5,193,364 MD EL BOLICHE 15186/07 3,498 2,534,440 5,187,449 2,528,525 5,187,449
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Appendix 2B continued: Coordinates (in UTM) of Mega’s mineral concessions, Chubut Province, Argentina: Sierra Cuadrada Project.
Co-ordinate system, projection Application Surface Project Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,586,018 5,066,319 2,586,018 5,059,356 2,583,518 5,059,356 MD SIERRA MORA 1 15352/07 5,209 2,583,518 5,057,953 2,579,372 5,057,953 2,579,372 5,066,319 2,583,518 5,057,953 2,583,518 5,057,356 2,588,719 5,057,356 2,588,719 5,053,362 CATEO SIERRA MORA I 14564/05 3,739 2,581,685 5,053,362 2,581,685 5,054,404 2,579,372 5,054,404 2,579,372 5,057,953 2,594,996 5,066,319 2,594,996 5,057,362 2,588,719 5,057,362 CATEO SIERRA MORA II 14565/05 8,043 2,588,719 5,057,356 2,586,018 5,057,356 2,586,018 5,066,319 2,602,319 5,066,319 2,602,319 5,053,362 2,593,719 5,053,362 CATEO SIERRA MORA III 14566/05 9,999 2,593,719 5,057,362 SIERRA 2,594,996 5,057,362 CUADRADA 2,594,996 5,066,319 2,601,703 5,053,362 2,601,703 5,047,660 2,587,714 5,047,660 CATEO SIERRA MORA IV 14567/05 9,999 2,587,714 5,050,937 2,579,372 5,050,937 2,579,372 5,053,362 2,595,495 5,047,660 2,595,495 5,038,963 2,585,123 5,038,963 CATEO SIERRA MORA V 14568/05 8,574 2,585,123 5,045,937 2,587,714 5,045,937 2,587,714 5,047,660 2,569,372 5,068,956 2,579,372 5,068,956 CATEO TERRAZA I 14818/06 10,000 2,579,372 5,058,956 2,569,372 5,058,956 2,555,372 5,082,456 2,565,372 5,082,456 CATEO TERRAZA II 14819/06 10,000 2,565,372 5,072,456 2,555,372 5,072,456 2,565,372 5,078,956 2,575,372 5,078,956 CATEO TERRAZA III 14820/06 10,000 2,575,372 5,068,956 2,565,372 5,068,956
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23.2.3 Appendix 2C: Coordinates (in UTM) of Mega’s mineral concessions in Mendoza Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,525,910 6,174,796 2,525,910 6,158,796 2,520,910 6,158,796 CATEO LOS MESONES 2906-M-05 7,340 2,520,910 6,172,596 2,523,910 6,172,596 2,523,910 6,174,796 2,515,911 6,165,596 2,515,911 6,164,596 2,520,910 6,164,596 CATEO LOS MESONES 2 2900-M-05 6,980 2,520,910 6,158,796 2,509,911 6,158,796 2,509,911 6,165,596 2,525,910 6,158,796 2,525,910 6,152,006 2,525,557 6,151,036 CATEO LOS MESONES 3 2901-M-05 9,903 2,525,557 6,148,796 2,515,911 6,148,796 2,515,911 6,158,796 2,525,557 6,148,796 2,525,557 6,147,195 2,525,910 6,147,195 CATEO LOS MESONES 4 2903-M-05 8,043 2,525,910 6,139,796 2,516,911 6,139,796 2,516,911 6,148,796 2,530,467 6,146,796 2,530,457 6,139,796 CATEO LOS MESONES 5 2902-M-05 3,186 2,525,910 6,139,796 2,525,910 6,146,796 2,520,369 6,199,796 2,520,369 6,199,313 2,523,086 6,199,313 2,523,086 6,199,796 2,525,836 6,199,796 CATEO DIAMANTE SUR 2904-M-05 8,407 2,525,836 6,184,796 2,523,260 6,184,796 2,523,260 6,194,796 2,513,911 6,194,796 2,513,911 6,199,796 2,506,371 6,173,796 2,506,371 6,172,696 2,506,911 6,172,696 2,506,911 6,169,596 2,505,511 6,169,596 2,505,511 6,166,796 2,501,911 6,166,796 CATEO CARRIZALITO 2905-M-05 3,045 2,501,911 6,167,796 2,499,911 6,167,796 2,499,911 6,171,010 2,502,305 6,171,010 2,502,305 6,171,418 2,504,561 6,171,418 2,504,561 6,173,796
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Appendix 2C continued: Coordinates (in UTM) of Mega’s mineral concessions in Mendoza Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,526,910 6,176,496 2,526,910 6,176,796 2,533,910 6,176,796 2,533,910 6,164,796 CATEO LOS REYUNOS 1 2909-M-05 9,910 2,525,910 6,164,796 2,525,910 6,174,796 2,523,910 6,174,796 2,523,910 6,176,496 2,538,910 6,180,796 2,538,910 6,170,891 2,533,910 6,170,891 CATEO LOS REYUNOS 2 2919-M-05 7,752 2,533,910 6,176,796 2,526,910 6,176,796 2,526,910 6,180,796 2,526,206 6,160,964 2,528,842 6,160,003 CATEO PUNTA DE AGUA 2920-M-05 1,327 2,525,910 6,152,006 2,525,910 6,160,996 2,505,902 6,212,803 2,512,929 6,212,803 CATEO LAS PEÑAS 1 2921-M-05 9,100 2,512,929 6,199,788 2,505,902 6,199,788 2,512,892 6,199,782 2,512,892 6,212,809 CATEO LAS PEÑAS 2 2922-M-05 9,696 2,520,398 6,212,809 2,520,398 6,199,782 2,504,467 6,181,996 2,504,467 6,180,092 2,506,211 6,180,092 2,506,211 6,173,796 2,503,911 6,173,796 CATEO CUCHILLAS BLANCAS 2923_M-05 4,804 2,503,911 6,179,296 2,499,911 6,179,296 2,499,911 6,175,212 2,496,711 6,175,212 2,496,711 6,181,996 2,541,610 6,151,796 2,541,610 6,153,296 2,547,910 6,153,296 2,547,910 6,146,746 2,546,910 6,146,746 2,546,910 6,143,446 CATEO PIQUILLINAL 2924-M-05 9,388 2,547,910 6,143,446 2,547,910 6,140,796 2,545,520 6,140,796 2,545,520 6,145,596 2,535,610 6,145,596 2,535,610 6,151,796 2,524,910 6,184,496 2,524,910 6,181,796 2,523,910 6,181,796 CATEO LOMAS NEGRAS 2925-M-05 5,950 2,523,910 6,176,496 2,516,811 6,176,496 2,516,811 6,184,496
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23.2.4 Appendix 2D: Coordinates (in UTM) of Mega’s mineral concessions in Salta Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 3,414,253 7,142,720 3,423,630 7,142,720 MD GALAN ESTE I 18.772/07 2,025 3,423,630 7,136,838 3,414,253 7,136,838 3,414,709 7,136,838 3,423,630 7,136,838 MD GALAN ESTE II 18.773/07 2,025 3,423,630 7,130,851 3,414,709 7,130,851 3,423,675 7,130,851 3,423,675 7,130,763 3,428,872 7,130,763 3,428,872 7,122,223 MD GALAN ESTE III 18.774/07 4,225 3,419,431 7,122,223 3,419,431 7,125,076 3,416,801 7,125,076 3,416,801 7,130,851 3,414,253 7,142,719 3,418,793 7,142,719 CATEO GALAN ESTE I 19.582/09 3,375 3,418,793 7,138,238 3,414,253 7,138,238 3,414,710 7,136,838 3,419,218 7,136,838 CATEO GALAN ESTE II 19.583/09 3,490 3,419,218 7,132,336 3,414,710 7,132,336 3,422,390 7,130,763 3,428,872 7,130,763 CATEO GALAN ESTE III 19.584/09 5,393 3,428,872 7,124,387 3,422,390 7,124,387
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23.2.5 Appendix 2E: Coordinates (in UTM) of Mega’s mineral concessions in San Luis Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 3,568,900 6,404,301 3,568,900 6,397,361 3,569,680 6,397,361 3,569,680 6,392,971 3,567,850 6,392,971 CATEO CONCARAN I 773-B-2007 9,016 3,567,850 6,390,836 3,563,370 6,390,836 3,563,370 6,389,171 3,561,760 6,389,171 3,561,800 6,404,301 3,519,700 6,421,545 3,520,413 6,421,545 3,520,401 6,423,513 3,524,393 6,423,513 3,524,393 6,413,612 3,522,595 6,413,612 CATEO SAN MARTIN I 775-B-2007 9,962 3,522,595 6,407,722 3,525,720 6,407,722 3,525,720 6,421,561 3,533,540 6,421,561 3,533,540 6,426,541 3,519,700 6,426,541 3,520,412 6,413,601 3,522,600 6,413,601 3,522,600 6,408,231 3,514,630 6,408,231 3,514,630 6,409,731 CATEO SAN MARTIN II 774-B-2007 9,974 3,512,915 6,409,731 3,512,915 6,416,851 3,514,923 6,416,851 3,514,923 6,421,544 3,520,412 6,421,544
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23.2.6 Appendix 2F: Coordinates (in UTM) of Mega’s mineral concessions in Santa Cruz Province, Argentina.
Co-ordinate system, projection Application Surface Type Concession Name POSGAR-WGS84-ARG_66W Reference Nº (Ha) X Y 2,512,242 4,603,250 2,499,400 4,603,250 2,499,400 4,606,000 2,502,200 4,606,000 CATEO ALBERTO 424.149/M/009 9,839 2,502,200 4,609,600 2,506,000 4,609,600 2,506,000 4,613,900 2,512,250 4,613,900 2,491,690 4,603,272 2,499,400 4,603,250 2,499,400 4,606,000 2,502,200 4,606,000 CATEO ALBERTO 1 424.222/M/009 5,300 2,502,200 4,609,600 2,500,000 4,609,600 2,500,000 4,608,900 2,491,700 4,608,900 2,550,910 4,573,900 2,550,910 4,560,200 2,547,533 4,560,200 CATEO PICASO I 425.585/M/009 9,900 2,547,533 4,564,900 2,541,786 4,564,900 2,541,781 4,573,900 2,557,910 4,573,900 2,557,911 4,560,200 CATEO PICASO II 425.586/M/009 9,900 2,550,910 4,560,200 2,550,910 4,573,900
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24 Appendix 3: Certification - R.M. Spencer
1. I am President and CEO of U3O8 Corp., Suite 710, 8 King Street East, Toronto, ON, M5C 1B5, Canada.
2. I am a graduate of The University of the Witwatersrand, Johannesburg, South Africa, where I graduated with a B.Sc (Honours) Degree in Geology in 1985. I graduated from the same university with a Ph.D in Geology in 1992. I have 24 years experience in a wide range of aspects of exploration and QAQC procedures for various commodities in South America and Africa, including gold, uranium and base metals.
3. I am a member of the Association of Professional Geoscientists of Ontario and am registered in the United Kingdom as a Chartered Geologist.
4. I have read the definition of a Qualified Person as set out in National Instrument 43-101 of the Canadian Securities Administrators (“NI 43-101”) and certify, that by reason of my education, affiliation with professional associations and past work experience, I fulfil the requirement to be a Qualified Person for the purposes of this document.
5. I am responsible for joint preparation of all sections of the technical report entitled “The Geology and Uranium Mineralization of the Laguna Salada Project, Chubut Province, and exploration strategies for exploration of earlier-stage properties in Argentina” dated March 23, 2010 (the “Technical Report”).
6. I visited some of the properties which are the subject of the Technical Report between January 8 and January 12, 2010. The purpose of this document is to provide an overview of the potential of Mega’s properties in Argentina to contain significant uranium mineralization and to establish priorities and appropriate budgets for further exploration in 2010. The properties visited included those constituting the following projects in Chubut Province: Gato-Krugger, Laguna Salada, Cerro Solo East, Condor, Mirasol and Sierra Chata.
7. As of the date hereof, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
8. I am a director and insider of U3O8 Corp. and have been employed by U3O8 Corp. since January, 2008.
9. I have read NI 43-101 and Form 43-101F1 and have prepared the Technical Report in compliance with these and in conformity with generally accepted international mining industry practices.
Richard M. Spencer
94 NI 43-101 Technical Report: Laguna Salada Uranium Project & exploration strategies for other exploration concessions held by Mega Uranium Ltd. in Argentina. March 2010
25 Appendix 4: Certification – R.A. Cleath
Certification
1. I am Vice President and CEO of U3O8 Corp., Suite 710, 8 King Street East, Toronto, ON, M5C 1B5, Canada.
2. I am a graduate of The University of Minnesota - Duluth, where I graduated with a B.S. Degree in Geology in 1985. I graduated from the South Dakota School of Mines and Technology in Geology in 1985. I have 25 years experience in various aspects of mineral exploration and QAQC procedures for various commodities in North and South America, including gold, uranium and base metals.
3. I am a member of the Australian Institute of Geoscientists and the Society of Economic Geologists.
4. I have read the definition of a Qualified Person as set out in National Instrument 43-101 of the Canadian Securities Administrators (“NI 43-101”) and certify, that by reason of my education, affiliation with professional associations and past work experience, I fulfil the requirement to be a Qualified Person for the purposes of this document.
5. I am responsible for co-authoring the technical report entitled “The Geology and Uranium Mineralization of the Laguna Salada Project, Chubut Province, and exploration strategies for exploration of earlier-stage properties in Argentina” dated March 23, 2010 (the “Technical Report”).
6. I visited some of the properties which are the subject of the Technical Report between January 8 and January 12, 2010. The purpose of this document is to provide an overview of the potential of Mega’s properties in Argentina to contain significant uranium mineralization and to establish priorities and appropriate budgets for further exploration in 2010. The properties visited included those constituting the following projects in Chubut Province: Gato-Krugger, Laguna Salada, Cerro Solo East, Condor, Mirasol and Sierra Chata.
7. As of the date hereof, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
8. I am an Officer and insider of U3O8 Corp. and have been employed by U3O8 Corp. since July, 2006.
9. I have read NI 43-101 and Form 43-101F1 and have prepared the Technical Report in compliance with these and in conformity with generally accepted international mining industry practices.
Richard A. Cleath
95