Stonehenge to acquire uranium projects

Stonehenge Metals Limited has entered into an agreement to acquire Chong Ma Mines Inc, which holds the rights to four South Korean uranium projects.

The full statement is below:

Stonehenge has entered into an agreement to acquire 100% of Chong Ma Mines Inc which holds the rights to 4 South Korean uranium projects (Uranium Projects).

Consideration is comprised of 10m Stonehenge shares plus 60m Stonehenge performance shares with A$3m to be spent on work commitments & purchase payments over 24 months including up to A$150k of expenses reimbursement.

The Uranium Projects comprise 42 granted mining rights & 14 mining right applications.
56 million lbs (Mlb) U3O8 at an average grade of 292 ppm have been estimated at the Uranium

Projects by the Korean Institute of Energy and Resources in a 1986 report.
The largest of the Uranium Projects, Daejon, contains 52 Mlb of U3O8 over 6kms of strike in a shallow deposit with open pit mining potential.

Potential exists for a rapid resource upgrade to JORC compliant status through evaluation of an existing 264 drill hole database which contains details from 36,293 meters of core.
A JORC compliant resource estimate and independent geological report has been commissioned from
"Hellman & Schofield" and "Watts, Griffis and McQuat".

South Korea currently imports 100% of its 3,500 tonnes (7.7 Mlb) per annum U3O8 requirements with 20 nuclear power plants operating and 8 more plants expected to come on line during the period from 2010 to 2016.

Uranium production is planned by the Korean Resources Corporation (KORES) on the adjoining 22 Mlb "Gumsan" deposit along strike to the south from Daejon.

The Directors of Stonehenge Metals Limited (Stonehenge, SHE or the Company) are pleased to advise that the Company has entered into an acquisition agreement (Acquisition Agreement) with Yellow Sun Mines (Operations) Pty Ltd (Yellow Sun) to acquire 100% of Yellow Sun's wholly owned Korean subsidiary, Chong Ma Mines Inc (Chong Ma).

Chong Ma holds the rights to 4 uranium projects comprised of 42 granted mining rights and 14 uranium mining right applications (together the Uranium Projects) in South Korea.

The Uranium Projects contain 56 million pounds of uranium oxide (at an average grade of 292 ppm U3O8) as determined by the Korean Institute of Energy and Resources (KIER) in a 1986 published report. KIER conducted significant exploration on the Uranium Projects from 1974 to 1985 (including 264 diamond drill holes totalling 36,293 meters of drill core).

The directors believe that this historical exploration provides a solid foundation to rapidly upgrade the existing historical foreign uranium resource estimates to JORC compliant status ahead of a mining feasibility study.

The Directors are of the opinion that the Uranium Projects present a near term opportunity for development due to South Korea's high dependence on imports of U3O8 and robust prices for uranium combined with increasing worldwide demand for nuclear power. The projects also hold significant potential for economic quantities of Vanadium and Molybdenum.

The Board is pleased to advise that Mr Christopher Sennitt and Mr Kim Wan Joong will be contracted to manage the Uranium Projects. Mr Sennitt and Mr Kim Wang Joong are directors and shareholders of Yellow Sun and Chong Ma and have extensive Korean resource sector experience.

Mr Sennitt has managed multi-commodity exploration programs throughout Asia and Australia over the past 28 years having worked previously with Indochina Goldfields Ltd (Ivanhoe Mining Ltd), Oriental Minerals Inc, Silk Road Resources Ltd, Battle Mountain Australia Inc, CSR Limited and Korean Minerals Group Inc.

Mr Kim Wang Joong has over 15 yrs of experience in exploration & mining in South Korea and was instrumental in discovery of the Eunsan & Moisan gold deposits for Indochina Goldfields Ltd (Ivanhoe Mining Ltd).