Northern Star signs over 75% uranium interest to U308

Perth-based minerals explorer Northern Star Resources Ltd will allow West Perth uranium explorer U308 Ltd to earn a 75 per cent interest in the uranium rights of its tenements for $200,000 per year - and for carrying the company to completion of a feasibility study.

Under the agreement, U308 will focus on Northern Star's Wilson River tenement group, comprising 2,200 kmsq of ground between Halls Creek and Kununurra.

The full text of a company announcement is pasted below

Diversified minerals group Northern Star Resources (ASX: NST) has added a further significant dimension to its East Kimberley exploration portfolio in Western Australia after reaching agreement with ASX-listed uranium explorer, U3O8 Ltd, on the uranium rights within its portfolio. The agreement will provide a platform to significantly accelerate uranium exploration on the highly prospective tenements.

A number of known uranium anomalies exist within Northern Star's Wilson River group of tenements, including A3, Frog, Frog West, Last and Antares. While no previous drilling has been reported on the tenements, preliminary exploration by Northern Star last year confirmed the uranium potential of the region. Significant uranium rock chip assays have been recorded at Frog (0.38% U3O8), Frog West (1.23% U3O8) and A3 (0.16% U3O8).

Significantly, a large number of major uranium-rich radiometric anomalies have been identified in the area. These target horizon areas are up to 7km long and have never been explored for uranium.

Under the agreement, U3O8 can earn a 75% interest in the uranium rights of the tenements by carrying Northern Star to completion of a Bankable Feasibility Study, with a minimum expenditure commitment of $200,000 per annum. The Wilson River tenement group comprises 2,200sq km of highly prospective ground between Halls Creek and Kununurra.

Northern Star's Managing Director, Mr Charles Wilkinson, said the new partnership would bring together U3O8 Ltd's uranium expertise and Northern Star's substantial and highly prospective East Kimberley holdings, providing a positive platform to realise the potential of the tenements.

"The East Kimberley region is considered one of the most significant unexplored provinces in Australia for uranium unconformity-style mineralisation," Mr Wilkinson said. "This type of mineralisation hosts many of the most significant uranium deposits in the world, including Cigar Lake (21% U3O8) in Canada, and Jabiluka and Kintyre in the Northern Territory."

"Our agreement with U3O8 Ltd will enable us to assess the potential for such a deposit in this region, utilising U3O8's expertise in uranium exploration," he added. "At the same time it complements U3O8's existing holdings, increasing its regional ground position to more than 2,700sq km and consolidating some 220km strike kilometres of prospective mineralised unconformity."

During the 1970s, rock sampling at U3O8 Ltd's Mad Gap project, located at the south western end of the Wilson River tenements, produced outstanding results of 4.65% U3O8, 4.42% U3O8 and 1.69% U3O8. Drill holes in the areas returned assays of greater than 0.2% U3O8.

The U3O8 Ltd management team comprises some of the most experienced uranium explorationists in Australia, including Managing Director, Mr Stephen Mann and Chief Geologist Xavier Moreau. Mr Mann was previously General Manager of Cogema Australia, a subsidiary of French nuclear energy group, AREVA. A uranium mineralisation specialist, Mr Moreau was a Senior Geologist and Structural Consultant for AREVA in Australia.

Northern Star continues to focus on its core commodity areas of gold, nickel-copper and PGE's in its Wilson River Project, with its 2007 field season due to commence shortly.