REG-U3O8 Holdings Plc: Option Signed To Acquire Entropy Resources S.A.

U3O8 Holdings Plc - Option Signed To Acquire Entropy Resources S.A., New Director Appointment and Issue of Equity

13 October 2009

HIGHLIGHTS

* Option to purchase Entropy Resources S.A. signed by U3O8 Holdings plc * Diversifies U3O8's project portfolio from being solely uranium to include copper, gold and silver in the San Juan province of Argentina

* Eduardo Videla, Vice-President of Entropy Resources S.A., appointed to the board of U3O8 as a Non-Executive Director, bringing substantial experience in the mining industry to the board

CONRAD WINDHAM, CHIEF EXECUTIVE OFFICER, SAID:

"After a long and detailed period of due diligence, I am delighted that we have been able to sign the option to purchase agreement with the shareholders of Entropy Resources and now look forward to working towards developing the projects that Entropy brings to U3O8, be it through joint ventures or otherwise.

The agreement with Entropy serves to diversify U3O8's interests in South America, and on exercise of the option we will have five projects within our portfolio prospective for uranium, copper, gold and silver."

OPTION TO PURCHASE AGREEMENT

The Board of U3O8 Holdings plc ("U3O8" or "the Company") is pleased to announce that following a period of detailed due diligence it has proceeded to sign an option to purchase agreement (the "Agreement") which grants the Company the right to acquire the entire issued share capital of Entropy Resources S.A., ("Entropy") (the "Option").

Entropy controls three exploration projects in the San Juan province of Argentina prospective for copper, gold and silver mineralization. The Amiches and San Francisco projects are both located in the high Andes, and are prospective for epithermal gold and silver deposits, whilst the Cerro Blanco project is located in the foothills of the Andes, and is prospective for a porphyry deposit. All of the projects are located in the province of San Juan, Argentina, which is where Barrick Gold's world-class Veladero gold mine is located. Further details of the projects are provided at the end of this announcement.

Under the Agreement, U3O8 Holdings plc has been granted the right to acquire he entire issued share capital of Entropy Resources S.A. at any time up to and including 31 December 2013. The consideration payable by U3O8 pursuant to the Agreement is £980,000 and a signing on bonus of $50,000 to be satisfied by cash payments of £500,000 and $50,000, and £480,000 through the issue of 8,000,000 new ordinary shares in the capital of the Company, credited as fully paid up at 6p per share. On completion, a payment of £10,000 is payable in respect of the signing on bonus, which represents the $50,000 less amounts already paid by the Company for exclusivity.

The remainder of the consideration is payable in tranches between the date of the Agreement and 31 December 2013 as follows:

Completion 31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 Total

Number of 1,000,000 1,400,000 2,000,000 1,600,000 1,200,000 800,000 8,000,000
shares

Cash £nil £50,000 £75,000 £100,000 £125,000 £150,000 £500,000

If the Company decides to exercise the Option, all consideration which has not, at that date been paid, shall be paid to Entropy Resources S.A.. However, U3O8 may terminate the Agreement by serving Entropy with 30 days' written notice, following which no further consideration would become due.

The Company will be working with the management of Entropy to further develop the current projects which will be funded externally as appropriate. There is currently no fixed intention over when the Option may be exercised as that decision will depend on the results of the future development of the projects and economic viability at the time. Management are, however, satisfied with the results of due diligence to date and are pleased to have concluded this stage
of negotiations.

Entropy's financial statements for the year ended 31 December 2008, show turnover of Pesos $nil and a loss before tax of Pesos $50,000, which relates to mining property maintenance and field exploration.

APPOINTMENT OF EDUARDO VIDELA

Upon signature of the option to purchase agreement on 14th September, Eduardo Videla, Vice-President of Entropy Resources S.A., was appointed as a Non-Executive Director of U3O8 Holdings plc.

Eduardo Videla is a Registered Geologist who has accumulated over 20 years of mining experience, of which the last ten have been working at Gemcom Australia Pty Ltd, a world-leading provider of mine production management solutions in Australia and Asia Pacific, as Senior Business Analyst. Eduardo is a Member of the AusIMM, and has significant experience in the mining industry, having worked as a geological consultant since 1993. In this time, Eduardo has assisted numerous companies during all phases of project development, including grass roots exploration, pre-feasibility and bankable feasibility studies, with an emphasis in ore-body modelling and resource and reserves estimation. He is a Qualified Person as defined in Canadian National Instrument 43-101 and the Australian Joint Ore Reserve Committee ("JORC").

Eduardo is President & Director of Entropy Resources Pty Ltd, a private company registered in Australia and has been Vice-president & Director of Entropy Resources S.A. in Argentina, prior to joining the board of U3O8 Holdings.

ISSUE OF EQUITY

U3O8 Holdings plc ("U3O8" or "the Company") announces that the Company has issued 1,000,000 ordinary shares as per the terms of the Option To Purchase Agreement between U3O8 and Entropy Resources S.A..

500,000 shares have been issued to each of Eduardo Videla and Jorge Bastias, and the new ordinary shares rank pari passu with the existing ordinary shares.

As a result, the total issued share capital is now 72,000,845 ordinary shares, of which the directors are interested in a total of 12,846,644 shares, representing 17.84% of the issued share capital.

The Directors of the Issuer accept responsibility for this announcement.

ENQUIRIES:

CONRAD WINDHAM, CHIEF EXECUTIVE OFFICER

TELEPHONE: 020 7803 0607

E-MAIL: Conrad@U3O8Holdings.com

CORPORATE ADVISERS

GRANT THORNTON UK LLP

FIONA KINDNESS

TELEPHONE: 020 7383 5100

Project Overview of Entropy Resources S.A.

Following the signing of the Option To Purchase Agreement with Entropy Resources S.A. ("Entropy") the Board of U3O8 Holdings plc ("U3O8") is pleased to provide the following overview on the three projects of Entropy.

THE AMICHES PROJECT

The Amiches project, which covers an area of 131 square km's, is located in the High Andes in the north-west sector of the province of San Juan, Argentina, about 40 kilometres west of the village of Pismanta. The project elevation ranges from 3,700 metres to 4,800 metres.

The oldest rocks in the area belong to the Cerro Agua Negra Formation, which is Upper Carboniferous to lower Permian in age. Overlying this unit with a strong angular unconforminty are the sub-aerial volcanics of the Choiyoi Group that are early Permian to early Triassic in age. Also, plutons related to the Colangüil Batholith were emplaced during the Permian.

Limited exploration performed by previous workers consisted of stream sediment and random rock chip sampling in the "anfiteatro" alteration zone. However, this work did yield anomalous rock chip samples with values up to 12.4 g/t gold and 60 g/t silver. Reconnaissance field work carried out by U3O8 during the due diligence period consisted of mapping, sampling and PIMA alteration studies.
This work also focused on the "anfiteatro" alteration zone. Analytical results confirmed the earlier work which indicated small, scattered zones of anomalous gold mineralization. The highest value obtained by U3O8 sampling was 4.9 g/t. However, results of the PIMA studies indicated that the alteration mineralogy at the "anfiteatro" is not caused by high sulfidation type fluids as stated by previous workers, but is restricted to structures and is more likely to have
been formed by a low sulfidation fluid event. Hence, the "anfiteatro" zone has the potential of hosting low sulfidation style mineralization within structurally controlled, epithermal quartz veins.

In addition, a new zone of interest referred to as the Pirquen zone was discovered west of Quebrada Amiches and the main "anfiteatro" alteration zone. Here, high sulfidation diagnostic alteration minerals such as dickite were identified in 80% of the samples collected covering an area of about 250 by 750 metres. This mineralogy is indicative of the upper part of a high sulfidation precious metal system. The zone beneath is considered to be highly prospective
for gold mineralization.

THE SAN FRANISCO PROJECT

The San Francisco project, which covers an area of 218 square km's, is located in the High Andes, south of the Amiches project, in the west central sector of the province of San Juan. The mean elevation is 3,700 metres and the highest elevations are reached at 4,600 metres.

The rocks in the area are similar to those at Amiches. Work performed by Entropy and previous workers at Cerro San Francisco indicate that it has characteristics of transitional systems ranging from high to low sulfidation epithermal style, structurally controlled mineralization hosted in quartz veins. Western Mining carried out a preliminary assessment of the project area
in the mid-1990's and identified interesting gold and silver anomalies in the Las Leñas area with values up to 2.4 g/t gold. No fieldwork was carried out by U3O8 on the San Francisco project during the due diligence period.

THE CERRO BLANCO PROJECT

The Cerro Blanco project is located in the Paramillos mining district, at an average altitude of 3,000 metres in the south-west province of San Juan near the town of Barreal, covering an area of 130 square km's.

Most of the area is covered by volcanic porphyries, tuffs and breccias of Permo-Triassic age, which have been intruded by hornblende porphyry at Morro de Cobre. Alteration and copper mineralization appears to be associated with this intrusive.

Porphyry copper exploration in the district commenced in the 1960's when Fabricaciones Militares carried out detailed surface mapping and sampling, which identified a porphyry intrusive on Morro de Cobre as well as hydrothermal alteration and surface copper mineralization. Samples collected ranged up to 1% copper and 136 parts per million molybdenum ("ppm"). In 1968 Fabricaciones Militares drilled three shallow holes totalling about 310 metres. The best hole was Hole 3, which bottomed in 60 metres, averaging about 500 ppm copper.

Field work, consisting of mapping and sampling was carried out by U3O8 on the intrusive and the host volcanics in order to assess the extent of the copper mineralization and to classify the porphyry so as to determine its potential for hosting significant copper mineralization. The results of the work were mixed in that they showed that the system has the potential to produce a significant deposit, but that the exposed extent of the favourable porphyry is limited.

This suggests that the target zone is not exposed at surface but is "blind" i.e. located at depth, possibly covered by the host volcanic rocks. Consequently, future work will entail geophysical surveys in order to identify any possible blind target. Two additional areas of alteration, Despoblados and La Fortuna, located in the southern sector of the project remain to be
evaluated.

Glossary of Technical terms used in the Announcement:

Cerro Agua Negra Formation: An Upper Carboniferous to Lower Permian age suite of sedimentary rocks made up of conglomerate, sandstones and mudstones. These rocks are about 330 to 270 My. years old and are overlain by the Choiyoi Group.

Choiyoi Group: A Permo-Triassic age suite of terrestrially deposited volcanic rocks made up of volcanic centres with associated intrusives and reworked lava flows. These rocks are about 270 to 200 My. years old.

Hydrothermal: Mineral deposits or minerals formed from fluids released from cooling magmas.

PIMA alteration studies: The PIMA machine is a field portable spectrometer which is designed to allow the geologist to measure "laboratory" standard spectra of minerals in the field. The spectra are of sufficiently high resolution to reveal spectral detail of absorption bands that can be used to identify minerals. It is generally used to identify hydrothermal alteration minerals associated with mineral deposits.

Epithermal quartz veins: These are quartz veins that are formed as part of a hydrothermal ore forming process. They may or may not contain metals with concentrations of economic interest

Hornblende porphyry: An intrusive rock made up dominantly of feldspars with a porphyrytic texture (occurring as discrete, large crystals) of hornblende. This rock type is associated with copper porphyry deposits.

Morro de Cobre : translates as "Copper Hill". There are copper occurrences on this hill.

High sulfidation: Also known as acid leached. These precious metal deposits are hosted by acid leached silicic rock associated with fluids generated in the volcanic-hydrothermal environment. The mineralization usually is disseminated, within breccias or as replacements of earlier minerals. Alteration halos are well developed and extensive.

Low sulfidation: Also known as quartz - adularia. The fluid responsible for the formation of these precious metal veins are similar to waters found beneath hot springs in geothermal systems i.e. waters that are reduced and neutral-pH. The mineralization tends to be localised in veins or stockworks. Alteration halos are restricted to close to the vein system.