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Purepoint Reports on Smart Lake Drilling

Toronto, Ontario, September 14, 2012 – Purepoint Uranium Group Inc. (TSX:PTU.V) announced today the results of their four hole, 1,134 metre drilling program at the Smart Lake JV project. Purepoint operates the Smart Lake project in the Athabasca Basin under the terms of an agreement with Cameco that permits Purepoint to acquire up to a 50% interest in the project.

The 2012 diamond drill program concentrated on the Shearwater electromagnetic (EM) conductor located on the Centre grid where initial drilling in 2008 discovered a radioactive structure that displayed multiple episodes of intense alteration and assayed up to 1,600 ppm U. All three completed holes continued to intersect favourable structures, alteration and radioactivity with assays up to 456 ppm U over 0.3 metres.

The Smart Lake project is considered to cover the southern extension of the Shea Creek deposit trend (max. grade of 58.3% U3O8 over 3.5 m) based on airborne electromagnetic and magnetic signatures. The Shea Creek deposits are located 55 km north of the Smart Lake property.

“The current drill program continued to track favourable rocks, structure, alteration occurring to impressive depths and radioactivity along the Shearwater Conductor” said Scott Frostad, Purepoint’s VP of Exploration. “We have promising results over a 400 metre strike length and all of the correct indicators for a discovery.”

Highlights:

  • Results from the 2012 drilling along the Shearwater conductor shows the area is host to widespread hydrothermal alteration, favourable structure and rock types that are associated with anomalous radioactivity (up to 456 ppm U over 0.3 m),
  • The Shearwater conductor has been traced for over 1.0 kilometer by a ground EM survey and over 1.4 kilometers by an airborne EM survey.
  • Program expenditures to date have completed Purepoint’s initial earn-in of 26% interest in the project.

The targeted Shearwater conductor was explained by graphitic pyritic pelitic gneiss in all three completed holes. These holes were drilled towards the east (85 degrees) at a dip of -80 through thick overburden averaging 95 metres in thickness. Athabasca sandstone was not encountered in any of the holes, however, 25 to 40 metres of Mannville Formation was found covering the basement rocks.

SMT12-01, spotted 200 metres south of the 2008 drill holes, intersected over 60 metres of strong clay alteration before encountering chloritized and moderately sheared graphitic and pyritic pelitic gneiss between 234.2 and 263.0 metres. Strongly silicified pelitic gneiss was then encountered to the completion depth of 369.0 metres. The best mineralization for SMT12-01 was 302 ppm U over 0.6 metres between 146.7 and 147.3 metres and was returned from chlorite and hematite altered pelitic gneiss.

SMT12-02, located 150 metres north of the 2008 drill holes, intersected chlorite, hematite and clay altered pelitic gneiss before encountering a strongly silicified graphitic and pyritic pelitic gneiss between 210.7 and 224.3 metres that hosted a 1.5 metre wide fault zone. Silicified pelitic gneiss with weak to moderate clay alteration was then encountered to the completion depth of 306.0 metres. Anomalous radioactivity was intersected between 208.8 and 209.1 metres assaying 155 ppm U over 0.3 metres.

SMT12-03 targeted the graphitic-pyritic unit between holes SMT12-01 and SMT08-01 and was intended to test for an interpreted east-west offset. Pelitic gneiss with hematite, chlorite and clay alteration was encountered to a depth of 221.3 metres, then strongly sheared and moderately clay altered pyritic pelitic gneiss to 233.9 metres, and strongly silicified graphitic pyritic pelitic gneiss to a depth of 253.2 metres. As was seen in SMT12-02, the graphitic/pyritic unit was weakly radioactive (max. of 106 ppm U over 1.0 metres) and hosted a fault zone, in this instance it was 1.0 metres wide and weakly clay altered. The hole then encountered pelitic gneiss with moderate clay alteration to a depth of 281.2 metres and siliceous pelitic gneiss to the completion depth of 292.6 metres.

SMT12-04 targeted the graphitic-pyritic unit between hole SMT12-03, which had encountered strong shearing, and SMT08-01, which had encountered a wide zone of brecciation. It was interpreted that an east-west trending structure may lie between these two holes and be responsible for the shearing and brecciation. Unfortunately, after only drilling 7.1 metres of basement rock, the rods encountered an open cavity, dropped 1.0 metres and became stuck. The hole was lost at a depth of 135.3 metres.

Smart Lake Project

The Smart Lake property includes two claims with a total area of 9,800 hectares situated in the southwestern portion of the Athabasca Basin, approximately 60 km south of the former Cluff Lake mine. Depth to the unconformity, where it occurs, is relatively shallow at less than 350 metres.

Aeromagnetic and electromagnetic patterns at Smart Lake reflect an extension of the patterns underlying the Shea Creek deposits (max. grade of 58.3% U3O8 over 3.5 m) 55 km north of the property. Exploration by Purepoint and Cameco has firmly established the presence of uranium mineralization, hydrothermal alteration and the location of a number of basement electromagnetic conductors never drill tested.

During 2008, Purepoint’s initial drill hole SMT08-01 intersected a weakly radioactive structure that displayed intense clay alteration, silicification and hematization while the strongest radioactivity was returned from a tension fracture in SMT08-06 assaying 1,600 ppm U over 0.1 metre.

About Purepoint

Purepoint Uranium Group Inc. is focused on the precision exploration of its thirteen projects in the Canadian Athabasca Basin. Purepoint proudly maintains project ventures in the Basin with the three largest uranium producers in the world, Cameco Corporation, AREVA and Rio Tinto. Established in the Athabasca Basin well before the initial resurgence in uranium earlier last decade, Purepoint is actively advancing a large portfolio of multiple drill targets in the world’s richest uranium region.

Scott FrostadBSc, MASc, PGeo, Purepoint’s Vice President, Exploration, is the Qualified Person responsible for technical content of this release.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

For further information please contact:
Purepoint Uranium Group Inc.

Chris Frostad, President and CEO
(416) 603-8368
www.purepoint.ca

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