Universal Uranium Enters Into Agreement to Sell Central Mineral Belt Properties to Crosshair Exploration

Universal Uranium Enters Into Agreement to Sell Central Mineral Belt Properties to Crosshair Exploration

Universal Uranium Ltd. is pleased to announce that it has entered into an agreement with Crosshair Exploration and Mining Corp. under which Crosshair will acquire all of Universal’s interest in the Central Mineral Belt (CMB) of Labrador, which totals approximately 4,737 claims. Universal and its 40% partner Silver Spruce Resources issued news releases on April 29, 2008, disclosing that Scott Wilson Roscoe Postle Associates had prepared a NI 43-101 Mineral Resource Estimate for the Two Time Zone on the Property estimating an indicated resource of 2.33 million pounds of uranium (U3O8) and an additional inferred resource of 3.73 million pounds of U3O8 (see below for tonnage and grade details).

“This transaction brings great value to Universal shareholders,” says Ron Atlas, CEO of Universal. “We feel that this acquisition expands our shareholders position in the Central Mineral Belt Labrador. Our shareholders will now have an interest in the only two mineral resources in the western portion of the CMB, the Two Time Zone and the Crosshair C Zone. In addition, the cash infusion into the company will allow us to develop our newly acquired potash property and our Lisbon Valley uranium project.”

Closing is expected to be completed on June 16, 2008 or such other date as may be mutually agreed, but no later than July 31, 2008. Closing is conditional upon both Universal and Crosshair obtaining regulatory approval to the transaction and to the satisfactory due diligence review by each of Universal and Crosshair.

Acquisition Details

As consideration for Universal’s interest in the Property, Crosshair will pay to Universal CDN$500,000 and issue 10,000,000 common shares and 7,500,000 warrants. Each warrant will entitle Universal to purchase an additional common share in the capital of Crosshair at CDN$1.00 per share for a period of three years from Closing subject to early expiry in the event that the average trading price of Crosshair’s common shares exceeds CDN$2.00 for a period of 20 days while the warrants are outstanding. The securities issued to Universal will be subject to escrow for two years following the Closing, to be released in equal tranches in three month intervals. Universal will grant Crosshair’s management a voting proxy over any Crosshair shares it holds or acquires on exercise of the warrants while such shares are in escrow. These escrow and voting provisions will expire if Universal distributes the securities to its shareholders. Universal will retain a 2% net smelter return royalty on its 60% interest in the Property, 0.5% of which may be purchased by Crosshair for CDN$1,000,000.

Crosshair will also purchase 4,444,444 units of Universal’s non-brokered private placement of 7,000,000 units announced on May 20, 2008 at a price of CDN$0.45 per unit. Each unit will consist of one common share of Universal and one share purchase warrant entitling Crosshair to purchase an additional common share of Universal at a price of CDN$0.65 per Universal Warrant for a period of 24 months. Closing of the private placement is not conditional upon closing of the acquisition of the claims.

Property Details

The Two Time Zone is the most advanced prospect within Universal’s 1,184 square kilometre land holdings in the CMB. This Zone, and the majority of Universal’s ground, is located north-west of Crosshair’s current CMB Project. The current land position map is posted on the Company website at: www.universaluranium.com. The Two Time Zone falls outside of Labrador Inuit Lands and is not directly impacted by the Nunatsiavut Government’s recent decision to place a three year moratorium on uranium mining within their self-governed Labrador Inuit Lands. This moratorium was put in place in order to allow the Nunatsiavut Government time to establish a lands administration system and to develop an Environmental Assessment Act and environmental protection legislation.

The Two Time Zone was first discovered in September 2006 following an airborne radiometric survey. The Zone has a current strike length of 475 metres (m) and remains open along strike and to depth. Mineralization at the Two Time Zone is hosted in an altered, brecciated and fractured, felsic intrusive, which carries extensive hematite, chlorite, carbonate and albite alteration. The zone is similar to large, iron oxide copper gold (IOCG) style, uranium rich, hematite breccia deposits such as the Olympic Dam deposit in Australia, the world’s largest uranium deposit.

Significant uranium drill intercepts include:

– 0.052% U3O8 over 107 m including

0.11% U3O8 over 30 m in CMB-07-6

– 0.042% U3O8 over 109 m including

0.10% U3O8 over 32 m in CMB-07-14

The Two Time Zone drill hole database includes 41 diamond holes totaling 11,254 meteres, plus five surface trenches. The NI 43-101 Mineral Resources are contained within eight separate zones. At a cut-off grade of 0.03% U3O8, indicated resources are estimated to total 1.82 million tonnes grading 0.058% U3O8 containing 2.33 million pounds U3O8. Inferred resources are estimated to total 3.16 million tonnes grading 0.053% U3O8 containing 3.73 million pounds U3O8. This estimate is based on drill hole data available as of February 4, 2008.

In addition to the Two Time Zone, the airborne radiometric survey identified many other high priority targets, several of which have been followed up by prospecting. One such zone is the Firestone Showing, which is located 8 km southeast of the Two Time Zone. This mineralized area consists of a 250 m by 600 m section of strong, pervasively altered granitic rocks, which gave off-scale scintillometer readings.

Universal Uranium Ltd. is a publicly held Canadian exploration company focused on acquiring, exploring and developing mineral properties located in favorable geo-political climates. The company is led by a highly skilled, experienced board and management team with significant successes in managing early stage mineral exploration companies.


Ronald Atlas, President & Chairman of the Board The Company seeks Safe Harbour. Standard & Poor’s Listed

Issued Share Capital: 44,115,069


Contacts: Universal Uranium Ltd. Taylor Little Investor Relations (604) 662-3903 Email: tlittle@universaluranium.com

Website: http://www.universaluranium.com

Source: Universal Uranium Ltd.

Share this post