Highlights

Testwork to date at Manyoni has shown potential amenability to heap leach processing, which if shown to be appropriate by gurrent planned testwork, could enable future production at low cut-off grades.

Background

The Manyoni and Bahi Region Project in Central Tanzania covers an area of approximately 4,000km2. The project area is linked by road and rail to the national capital of Dodoma located 70kms to the east.

The region incorporates an extensive closed draining system developed over weathered uranium rich granites. This drainage captures dissolved uranium leached from underlying rocks and transports it to suitable precipitation trap sites (playa lakes) along the drainages, and ultimately into the enormous 40x30km Bahi Playa Lake. Uranex holds approximately 400km2 (or approximately one-third) of the ‘head waters’ entry in the northwest area of Lake Bahi.

The shallow natured deposits found to date in the Bahi playa lake system in Central Tanzanaia has some characteristics comparable to the Yilgarn playa lake/ calcrete uranium province in Western Australia.  This includes scope for proximate Playa Lake deposits to contribute to the Uranex ‘One Plant – Multiple Sources’ production strategy.

The first uranium project in the Bahi Region of Tanzania has been recently named the Manyoni Project to differentiate between the Company’s development project and its other exploration holdings in the Bahi Region still undergoing exploration.

The Manyoni Project, comprising less than 50% of the Company’s exploration in the Bahi region, encompasses up to five playa lakes in the Manyoni District and forms the basis of the Company’s resource estimate recently announced in June 2008.

Recent Work

The Manyoni resource estimate comprises a JORC Inferred Resource of 14 million tonnes, averaging 218ppm U3O8 for a contained U3O8 content of approximately 6.7 million pounds (or approximately 3,000 tonnes contained U3O8), at a cut off
grade of 150ppm U3O8. Estimated contained U3O8 more than doubles to approximately 15.3 million pounds (or approximately 6,900 tonnes) at the 100ppm U3O8 cut off grade.

Metallurgical test work recently commenced on the Project. Preliminary sighting tests were undertaken on selected assay pulps, and preliminary results indicate that a carbonate leach regime may be a favourable metallurgical process route. Further results are expected during the December Quarter.

Future Work Planned

A pre-feasibility study for the Manyoni Project Area has commenced with aim to present the study to the Tanzanian Government.

Working in close co-operation with Government, the study will evaluate options on:

• Resource material sourcing, including variations on the “One Plant – Multiple Sources” strategy
• Project payback period based on the high grade schrockingerite zone at Manyoni C1
• Applicable mining methods and parameters
• Favourable metallurgical process routes and parameters
• Associated physical and social environment impact parameters
• Product refinement levels and attendant sales alternatives.

The results will address the validity of anticipated low capital and operating costs, reflecting the shallow, negligible strip nature of the deposits, and the anticipated largely interstitial nature (that is between – not in – the unconsolidated hosting sediment grains) of the mineralisation.

Uranex has purchased a sonic drill rig in order to circumvent the continuing supply issues being encountered in all sectors of the resources industry. Sonic drilling produces high quality ‘as in-situ’ samples in the usually difficult drilling conditions presented by unconsolidated sediments.  The rig was delivered in December 2008 and it is anticipated this schedule will allow considerable extension and resource upgrade drilling during 2009.