Eagle Plains/SinoGas Execute Option Agreement on Eagle Lake, Saskatchewan Uranium Property

Cranbrook, B.C., February 2, 2012: Eagle Plains Resources Ltd. (TSX-V:EPL) and SinoGas West Inc. (TSX-V:GZW.P) have entered into a formal option agreement whereby Eagle Plains has agreed to grant an option to SinoGas to earn a 60% interest in EPL’s 100% owned Eagle Lake uranium project located 28 km southeast of Cameco's Key Lake mining operation in north-central Saskatchewan, Canada.

Terms of the Option Agreement

Pursuant to the option agreement (subject to regulatory approval), SinoGas West Inc. will have the exclusive option to acquire a 60-per-cent interest in the Eagle Lake property by issuing up to one million common shares of the company, making aggregate cash payments of $300,000 and incurring aggregate exploration expenditures of $3-million over the course of five years. $350,000 is currently budgeted for 2012 exploration work.

Property Highlights

  • 80-150m wide mineralized dyke swarm discovered at Red October occurrence, with mineralized dykes locally up to 10m in width
  • Samples returned up to 1.56% U308 over 1m and grab samples returned up to 2.24% U308
  • 800m+ mineralized boulder train indicates broad mineralized zone

Property History

The claims cover 14,000 ha containing uranium mineralization originally discovered by Great Plains Development Company of Canada Ltd. during the 1969 Athabasca Basin uranium rush. The 1969 work program was carried out under the supervision of R.W. (Bob) Termuende, later a founding director of Eagle Plains.

Exploration in the area now covered by the Eagle Lake property by Great Plains between 1969 and 1971 reportedly identified a float boulder train 1.5 kilometers in length. Great Plains reported high radon gas values from both water and soil samples collected near the uraniferous boulder train. Notably, the bedrock source for these float boulders was not located.

Mulligan Capital (now Blue Sky Uranium) optioned the property in August, 2006 and in 2007, carried out systematic exploration work including an airborne geophysical survey, soil geochemical sampling, mapping and prospecting. Blue Sky subsequently relinquished its option in August, 2008. A number of areas of interest were identified during the course of this work, including the “Red October” showing. Subsequent work has defined the Red October showing over 270 meters of strike length in trenches, within a geochemical anomaly of over 500 meters strike length associated with an airborne geophysical anomaly of greater than 1 kilometer. Samples collected from the showing and trenches returned exceptional uranium assays including a 1.0 m yellow-stained chip sample which returned 1.56% U3O8 and a grab sample of a yellow-stained black alteration selvage which returned 2.24% U3O8. The mineralization is associated with intrusions and meta sediments of the Wollaston Group.

The Eagle Lake property lies within the Wollaston domain and consists of metasedimentary gneisses and schists, including pelitic schists and gneisses with graphitic horizons. EPL will focus on exploring for uranium deposits in north to northwest-trending faults which are interpreted to have formed structural traps where uranium mineralization may have been deposited and preserved.

About Eagle Plains Resources

Eagle Plains continues to conduct research, acquire and explore mineral projects throughout western Canada. Since 1992, EPL has been acquiring and developing early stage projects utilizing an in-house team of geologists, technicians and specialists. Considered a prolific project generator with over 35 properties, EPL invites joint venture participation to expedite development, reduce risk and enhance exposure to discovery.

Current third party agreements if maintained to completion expose EPL to over $64M in exploration expenditures, $7.4M cash and 28.6M shares in partner companies. Completed agreements have yielded over $17M in exploration spending, $1M cash to EPL and a total of 16M shares of partner companies including Alexco Resource Corp., NovaGold Resources Inc., Giyani Gold Corp., Aben Resources Ltd. and others.

Expenditures during 2011 on Eagle Plains-related projects were approximately $9,100,000 which was funded by Eagle Plains and third party partners. This exploration work resulted in approximately 9400m diamond drilling and extensive ground-based exploration work facilitating the advancement of more than 15 projects at various stages of development.

On behalf of the Board of Directors

“Tim J. Termuende”
President and CEO

For further information on EPL, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: mgl@eagleplains.com or visit our website at http://www.eagleplains.com

 

Cautionary Note Regarding Forward-Looking Statements

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.