Mega Uranium to Sell Lake Maitland Uranium Project to Toro Energy

Mega Uranium to Sell Lake Maitland Uranium Project to Toro Energy 
TORONTO, ONTARIO -- (Marketwired) -- 08/12/13 -- Mega Uranium Ltd.
(TSX:MGA) ("Mega" or the "Company") is pleased to announce that it
has entered into a binding term sheet with Toro Energy Limited
("Toro") (ASX:TOE) to sell its Lake Maitland Uranium Project ("Lake
Maitland") in Western Australia to Toro for 415 million ordinary
shares of Toro (the "Transaction"). Upon completion of the
Transaction, Mega will own approximately 28% of the issued and
outstanding shares of Toro.  
Toro is an Australian uranium company listed on the Australian Stock
Exchange. Toro's flagship and wholly-owned Wiluna uranium project is
located 30 km southeast of Wiluna in Central Western Australia and
approximately 90 km north-west of Lake Maitland. Toro has updated
prefeasibility estimates and the process engineering phase of the
definitive feasibility study complete for mining of two shallow
calcrete deposits, Lake Way and Centipede, for which all government
environmental approvals have been received.  
Highlights of the Transaction  


 
--  Consolidates quality Western Australian uranium assets and expands
    Mega's uranium interests into an enlarged Wiluna project development; 
--  Environmental permits for Toro's first two deposits at the Wiluna
    project, Centipede and Lake Way, have already been granted, which
    potentially shortens the development time-frame for Lake Maitland; 
--  Operational synergies potential across geologically similar projects; 
--  Opportunity for significant capital savings due to the requirement for
    only one central processing facility to treat ore from Lake Maitland and
    Toro's Wiluna deposits; and 
--  Potential further benefit for Mega as shareholder in the enlarged Toro. 

 
Stewart Taylor, Mega's President said, "Mega is pleased to partner
with Toro on the development of Wiluna. Given the proximities and
similarities of the main deposits, the integration of Lake Maitland
into the broader Wiluna Project is expected to unlock benefits for
both Toro and Mega shareholders." 
The Transaction is conditional upon the receipt of various approvals,
including the approval of Toro shareholders, Mega's Project Partners
(as defined below) consenting to and not exercising any pre-emptive
rights that they may have in connection with the Transaction, and
other customary closing conditions. The Transaction has the support
of Toro's major shareholder, OZ Minerals Limited, which has a 39%
equity interest in Toro, and which has confirmed that, subject to the
independent expert report obtained by Toro indicating that the
acquisition is fair and reasonable and no superior proposal emerging,
it intends to vote in favour of the Transaction. On completion of the
Transaction, OZ Minerals will hold a 28.5% interest in Toro. 
Mega understands that following completion of the Transaction, Toro's
focus will be to work towards implementation of the already approved
Wiluna Project and to commence studies to optimise the inclusion of
Lake Maitland within the overall Wiluna Project over time. This will
include reviewing optimal mine planning and investigating the
opportunity to expand the capacity of the Wiluna Project above Toro's
currently planned 1.3 Mtpa processing capacity.  
The Transaction does not impact upon Mega's previously announced
proposed merger with Rockgate Capital Corp. (see June 6, 2013 press
release), which the parties continue to work toward. 
Key Terms of the Transaction 
The Transaction is expected to be effected by Toro's subsidiary, Nova
Energy Pty Ltd, acquiring 100% of the issued capital of Mega's
subsidiary, Redport Exploration Pty Ltd ("Redport"). Redport, through
its 100% owned subsidiaries, will own the relevant Lake Maitland
tenements and associated assets and rights and at completion will
have a surplus cash balance of $1.5 million. Consideration for the
Transaction is 415 million fully paid ordinary shares in Toro.  
On completion of the Transaction, Mega will hold a 28% equity
interest in Toro. Toro has agreed to grant Mega rights to appoint two
nominees to the Toro board of directors for so long as Mega maintains
at least a 22% interest in Toro. Initially, Mega's Executive Vice
President - Corporate Affairs, Richard Patricio, and Executive Vice
President - Australia, Richard Homsany, will join the board of Toro
as non-executive directors. Mega has also agreed to a 12-month escrow
of its Toro shares, with customary market exceptions, and to a
standstill which limits Mega's capacity to acquire further Toro
shares within the next 2 years.  
Project Partners' Position Regarding Lake Maitland  
In June 2009, Mega entered into a series of agreements with JAURD
International Lake Maitland Project Pty Ltd ("JAURD") and Itochu
Minerals & Energy of Australia Pty Ltd ("IMEA") (together the
"Project Partners"). Under those agreements, the Project Partners
hold an option to acquire a 35% interest in Lake Maitland for
approximately US$49 million (of which US$39 million remains payable)
which can be exercised at any time up to a decision to mine on Lake
Maitland. If the Project Partners exercise their option to acquire an
interest in Lake Maitland, they will be entitled to various rights
over the development of, and offtake from, Lake Maitland and are
obliged to contribute financing for their share of costs for the
development of Lake Maitland in order to maintain their respective
joint venture interests in Lake Maitland. 
In addition, the Project Partners hold certain pre-emptive and
consent rights that may apply to the Transaction. 
Conditions Precedent to Completion  
The conditions precedent to completion of the Transaction include,
but are not limited to: 


 
--  Toro shareholder approval under ASX LR7.1 and s611 Item 7 of the
    Corporations Act; 
--  Any necessary FIRB approval required by Mega and Toro in relation to the
    transaction; and 
--  The Project Partners consenting to the Transaction and not exercising
    any pre-emptive rights that may apply. 

 
Timing  
It is anticipated that a meeting of Toro shareholders will be held in
early October 2013 at which Toro shareholders will be asked to
approve the Transaction. It is expected that completion of the
Transaction would occur soon thereafter, subject to the satisfaction
or waiver of all conditions precedent to completion. 
Break-Fees  
Reciprocal break fees of $1.0 million are payable in certain
circumstances by each of Mega and Toro.  
Mega Advisors 
Dundee Capital Markets is acting as financial advisor to Mega.  
Mega Uranium Ltd. 
Mega Uranium Ltd. is a Canadian mineral resources company listed on
the TSX, with a focus on uranium properties. Mega has a global
presence with projects in Australia at feasibility and
pre-feasibility stages, and exploration projects in Australia, Canada
and Cameroon. Currently, Mega is focused on the development of two of
its Australian projects, Lake Maitland located in Western Australia
and Ben Lomond located in Queensland. Mega has a farm in and joint
venture with JAURD and IMEA on the Lake Maitland Project. Further
information on Mega can be found on the company's website at
www.megauranium.com. 
NOTE REGARDING FORWARD-LOOKING INFORMATION 
This news release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act
of 1995 and "forward-looking information" as such term is defined in
applicable Canadian securities laws (together referred to herein as
"forward-looking statements"). Except for statements of historical
fact relating to Mega or Toro, information contained herein
constitutes forward-looking statements. Forward-looking statements
are characterized by words such as "plan," "expect", "budget",
"target", "project", "intend," "believe", "anticipate", "estimate"
and other similar words, or statements that certain events or
conditions "may" or "will" occur. Forward-looking statements in this
news release include, but are not limited to, statements relating to
completion of the combination of Mega and Toro and the expected
timing of completion, statements regarding the anticipated completion
date of a feasibility studies regarding the Wiluna project,
statements regarding the shareholding of Mega at closing, statements
regarding the expected benefits to Mega shareholders of the proposed
transaction. Forward-looking statements are based on the opinions,
assumptions and estimates of management considered reasonable at the
date the statements are made, and are inherently subject to a variety
of risks and uncertainties and other known and unknown factors that
could cause actual events or results to differ materially from those
projected in the forward-looking statements. These factors include
(i) that Mega and Toro will complete the proposed transaction
described herein, (ii) political developments, whether generally or
in respect of the mining industry specifically, in Australia not
consistent with Mega and Toro's current expectations, (iii) Mega's
and Toro's expectations in connection with the projects discussed
herein being met, (iv) the impact of general business and economic
conditions, global liquidity and credit availability on the timing of
cash flows and the values of assets and liabilities based on
projected future conditions, fluctuating metal prices and currency
exchange rates, (v) the value that the Mega will realize from its
Toro shareholdings, (vi) changes in project parameters as plans
continue to be refined,(vii) the continued employment of key Mega and
Toro employees, as well as those risk factors discussed or referred
to in Mega's annual Management's Discussion and Analysis and Annual
Information Form for their respective most recently completed year
end filed with the applicable securities regulatory authorities and
available at www.sedar.com. Although Mega has attempted to identify
important factors that could cause actual actions, events or results
to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results not to be anticipated, estimated or intended.  
There can be no assurance that forward-looking statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Mega does not
undertake any obligation to update forward-looking statements if
circumstances or management's estimates, assumptions or opinions
should change, except as required by applicable law. The reader is
cautioned not to place undue reliance on forward-looking statements.
The forward-looking information contained herein is presented for the
purpose of assisting investors in understanding Mega's expected
financial and operational performance and results as at and for the
periods ended on the dates presented in their respective plans and
objectives and may not be appropriate for other purposes. 
Stewart Taylor, Mega's President and Qualified person under NI43-101,
is responsible for this release and has verified the contents
disclosed.
Contacts:
Mega Uranium Ltd. - Investor Relations
Richard Patricio
Executive Vice President, Corporate Affairs
(416) 643-7630
info@megauranium.com
www.megauranium.com
 
 
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