UEX Begins 2006 Summer Drilling at Hidden Bay and Announces 2006 Winter Exploration Results

UEX Begins 2006 Summer Drilling at Hidden Bay and Announces 2006 Winter Exploration Results

Wednesday, August 23rd 2006

UEX Corporation (“UEX”) is pleased to announce the results of the 2006 winter drilling program and the commencement of a 2006 summer drilling program on its 100% owned Hidden Bay Uranium Project (“Hidden Bay”). Hidden Bay is located in the eastern Athabasca Basin of northern Saskatchewan and totals 57,721 hectares (142,571 acres) in size.

2006 Hidden Bay Winter Drilling Program Results

The Winter 2006 exploration program at Hidden Bay was carried out in two areas:

– West Bear-Mitchell-Dwyer area, to reassess historical mineralization at the Pebble Hill and North Shore Prospects, and near the West Bear Deposit, currently the subject of a full feasibility study, to test for extensions of mineralization there; – Telephone Lake area, to further explore along strike of the Sue

deposits located to the north on the McClean Lake Mine property.

The $2.3 million (CDN) winter program comprised 11,582 meters of diamond drilling in a total of 65 drill holes. Highlights include intersections of 0.20% U3O8 over 6.80 metres and 0.11% U3O8 over 6.50 metres within a 30 metre mineralized intercept in hole SP-166, which tested a complex fault structure on the Telephone Lake Trend. Grades from sub-intervals within these two mineralized intervals in SP-166 ranged up to 0.66% U3O8 over 0.5 metres.

Significant intercepts with grades greater than 0.1% U3O8 are reported in Table 1 below. True widths of mineralized intervals have not yet been determined. All uranium analyses were performed at Saskatchewan Research Council Geoanalytical Laboratories by fluorimetry and ICP.

Telephone Lake Trend 2006 Winter Drilling Program

The Telephone Lake fault system represents the southern continuation of a network of faults and graphitic conductors that to the north host the producing Sue uranium deposits at McClean Lake operated by AREVA Resources Canada Inc (“AREVA”). The Telephone Lake Trend contains several areas of anomalous mineralization and alteration within which several significant intercepts have been obtained. For example, hole SP-156, drilled by UEX in 2005 and located at the north end of the Telephone Lake Trend only 2.1 kilometres southwest of the Sue E Deposit and 2.5 kilometres south of the McClean Lake Deposits, encountered uranium mineralization at a depth of 189.8 metres in basement rocks approximately 6.2 metres below the unconformity. The mineralized interval, from 189.8 to 190.3 metres, averaged 4.52% U3O8 over its 0.5 metres (see UEX News Release, July 26, 2005).

The objective of the 2006 winter drilling program was first to locate and test the Telephone Lake fault structure within large gaps between historical drill holes, and second, to follow-up known mineralized drill intercepts and areas of alteration. A total of 7,624 meters were drilled in 29 holes, of which 24 were completed, with 5 abandoned due to poor ground conditions. Follow-up drilling of a number of key target areas was not possible due to unusually mild winter weather and the resulting lack of freeze-up on many waterways. For example, in-fill drilling of a prospective 4 kilometre-long gap in historical drilling under Phantom Lake along the Telephone Lake Trend was postponed as result of unsafe ice conditions on the lake. Testing of this and other high-priority target areas is scheduled for the Winter 2007 drilling program.

Most of the Winter 2006 drill holes successfully intersected the Telephone Lake fault structure and confirmed a 50 to 80 metre vertical offset on the high-angle reverse fault, which has locally created a prospective “basement wedge”, a geological feature often associated with major unconformity uranium deposits. Holes SP-173 to SP-176 were follow-up holes to 2005 hole SP-156 and generally intersected narrow intervals of uranium mineralization (see Table 1). Hole SP-176, located 300 metres northeast of SP-156, represents the best of these mineralized intersections, grading 0.37% U3O8 over 0.5 metres from 202.4 to 202.9 metres, continuing to demonstrate the prospective nature of the Telephone Lake Trend in this area.

Drilling in the South Telephone area, 2.6 kilometres to the southwest of SP-156 along the Telephone Lake Trend, was intended to test for extensions of mineralization intersected by historical holes SP-32 (0.60% U3O8 over 0.9 metres) and SP-38 (0.62% U3O8 over 0.6 metres). Hole SP-166 intersected an approximately 30 metre interval containing local disseminated and veinlet-controlled pitchblende in faulted Athabasca sandstone adjacent to faulted basement rocks within the Telephone Lake fault zone. Mineralization in this zone was found in two mineralized intersections:

– 0.20% U3O8 over 6.80 metres from 129.7 to 136.5 metres, including subintervals of 0.66% U3O8 over 0.5 metres, 0.64% U3O8 over

0.4 metres and 0.57% U3O8 over 0.5 metres;

– 0.11% U3O8 over 6.50 metres from 148.5 to 155.0 metres, including 0.64% U3O8 over 0.2 metres, 0.33% U3O8 over 0.2 metres and 0.32%

U3O8 over 0.4 metres.

Follow-up holes 25 metres east, west and south of hole SP-166 did not locate additional significant mineralization. Follow-up drill testing to the southwest of hole SP-38 was not possible due to unsafe ice conditions on the lake. Testing of the SP-166 area and other prospective targets along the southern end of the Telephone Lake Trend, where in 2004 anomalous radioactivity and alteration were observed in the shallow basement environment, is planned for the 2007 winter drilling program.

West Bear and Mitchell-Dwyer Trend Winter 2006 Drilling Program

Thirty-six reconnaissance diamond drill holes were drilled for a total of 3,958 metres in the West Bear Deposit (“West Bear”) area and along the adjacent Mitchell-Dwyer Trend.

Sixteen holes totaling 1,831 metres were drilled immediately south of West Bear to test for deeper, down dip extensions of the deposit in basement rocks. West Bear mineralization lies within Athabasca sandstone approximately 13 to 31 metres from surface over a strike length of approximately 300 metres (see UEX News Release January 25, 2006). UEX’s 2006 exploration drilling at greater depths below the known outline of the deposit did not encounter significant mineralization. However, potential may exist for additional mineralization on the southeastern edge of the deposit where hole WBE-108 intersected 0.30 metres grading 0.33% U3O8 from 24.9 to 25.2 metres. UEX’s 2002 hole WBE-19 intersected 1.5 metres grading 0.17% U3O8 from 43.5 to 45 metres in a highly altered fault zone at the contact between pegmatite and graphitic pelitic gneiss, also in this area. Follow-up drilling is planned as part of the upcoming 2007 winter program.

West Bear lies on an arcing conductive trend, which extends to the north as a part of a conductive structure observed in the 2004 airborne electromagnetic (VTEM) survey. The data suggests the presence of a dome-like structure that has been termed the Dwyer Lake Dome. A series of previously discovered prospects exist along the conductive trend on the western and northern margin of this dome, including the Pebble Hill, North Shore and Blanche Lake Prospects. These three prospects were tested by additional drill holes, which followed-up on historical drilling.

Two holes (186 metres) were drilled at the Pebble Hill Prospect lying to the west of West Bear to test for further mineralization to the east and north of known mineralization. A third hole (120 metres) tested a prominent conductive feature on the Mitchell-Dwyer Trend to the north. No significant mineralization was intersected and no further work is planned in the Pebble Hill area at this time.

Thirteen holes (1,287 metres) were drilled to relocate and evaluate the North Shore Prospect on Mitchell Lake northwest of West Bear. UEX’s drilling successfully relocated the North Shore Prospect mineralization with four of the holes encountering significant mineralization (see Table 1). For example, hole WBE-117 intersected 0.2 metres grading 0.51% U3O8 between 43.6 and 43.8 metres depth immediately above the unconformity. Follow-up drilling in 2007 is planned to target extensions to the mineralization to the south and east along the Mitchell-Dwyer conductive trend on the northwestern margin of the Dwyer Lake Dome.

Four holes (534 metres) were drilled at the Blanche Lake Prospect further to the east. The 2006 winter drilling program was intended to relocate and test for potential extensions of known mineralization. Historical drill hole BC-08 graded 0.21% U3O8 over 0.4 metres. UEX’s 2006 hole WBE-112 intersected 0.13 metres grading 0.10% U3O8 (see Table 1) and although anomalous radioactivity was intersected along the same structure at depth, no other significant mineralization was found. The Mitchell-Dwyer conductive trend to the east remains highly prospective, particularly those sections associated with an offset caused by the Ahenakew Fault, a “Tabbernor” fault, which is a north-trending regional fault similar to the Dragon Lake Fault associated with the Rabbit Lake Deposit.

2006 Hidden Bay Summer-Fall Drilling Program

A $3.0 million (CDN) diamond drilling program totaling approximately 18,000 metres is underway at Hidden Bay, which includes the second phase of a previously-announced, two-phase drilling program initiated in July 2005 on the Raven-Horseshoe Uranium Deposits (“Raven-Horseshoe”). The Phase Two drilling program consists of approximately 12,000 metres of drilling and is designed to delineate the extent of higher grade portions of the Horseshoe Zone at a cost of $2.0 million (CDN). One drill rig is currently working on site and a second rig is planned to be added during September 2006.

To view maps of Hidden Bay please access UEX’s website at

www.uex-corporation.com under “Latest Updates”.

The information in this document has been compiled and reviewed by David Rhys, P. Geo., a qualified person as defined by National Instrument 43-101.

About the Raven-Horseshoe Deposits

Raven-Horseshoe hosts a total historical resource estimate of 6.7 million tonnes at an average grade of 0.16% U3O8, representing approximately 23 million contained pounds of U3O8. (Note: this is a historical resource estimate completed by Gulf Minerals (“Gulf”) that was not estimated using current Canadian Institute of Mining, Metallurgy and Petroleum categories, and for which no current resource or reserve confidence categories were applied.) The deposits are of the basement-hosted type and are located approximately 5 kilometres southeast of the edge of the Athabasca Group sandstones, which normally cover uranium deposits in the Athabasca Basin. The deposits are also located less than 5 kilometres south of Cameco Corporation’s (“Cameco”) Rabbit Lake Mill. The deposits are comprised of two shallow plunging zones developed over a 2.5 kilometre strike length, and at depths of 50 to 450 metres below surface. Mineralization is hosted by zones of hematite alteration which fringe the margins of a broad, south dipping, fault-controlled clay alteration zone, in a geometry that is comparable to some roll-front style uranium deposits. Unlike unconformity-type deposits such as McArthur River and Cigar Lake, Raven-Horseshoe is within competent pre-Athabasca basement rocks with no overlying sandstone that could allow underground ramp access and conventional underground mining methods if an economic resource is defined. Cameco’s producing Eagle Point Mine, located 17 kilometres to the northeast, is also in basement rocks and is mined by such methods.

About UEX

UEX is a Canadian uranium exploration company formed under an agreement between Pioneer Metals Corporation and Cameco. Cameco, the world’s largest supplier of uranium, is UEX’s largest shareholder. UEX began trading on the Toronto Stock Exchange in July 2002 and is actively involved in the exploration and development of 19 uranium projects, including seven that are 100% owned and operated by UEX, one joint venture with AREVA that is operated by UEX, ten under option from AREVA and one under option from Japan-Canada Uranium Company, Limited, which are operated by AREVA. The 19 projects, totaling 386,650 hectares (955,400 acres), are located in the eastern, western and northern perimeters of the Athabasca Basin, the world’s richest uranium belt, which accounts for approximately 30% of the global primary uranium production. UEX’s exploration budget for 2006 is $19.0 million and the Company has a cash position of approximately $84.0 million.

For further information

UEX Corporation, Suite 1007 – 808 Nelson Street, Vancouver, B.C., Canada, V6Z 2H2, Ph: (604) 669-2349, Fax: (604) 669-1240, Website: www.uex-corporation.com, email: uex@intergate.ca

Source: UEX Corporation

Share this post