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Consolidated Financial Statements of

June 30, 2009

(Unaudited)

Contents

Consolidated Financial Statements

Consolidated Balance Sheets 2

Consolidated Statements of Operations and Deficit 3

Consolidated Statements of Cash Flows 4

Notes to the Consolidated Financial Statements 5-29

2

(Unaudited -in thousands of dollars, except for securities and per share amounts)

June 30, September 30,

2009 2008Assets

CurrentCash and cash equivalents (note 5) $ 926 $ 2,512 Marketable securities (note 6) 23,342 46,512 Prepaid expenses and receivables 2,323 3,832

26,591 52,856 Mineral properties and related expenditures (notes 3 and 4) 292,797 283,104 Deferred exploration expenditures 2,805 2,649 Investments in public companies (note 7) 12,655 7,038 Equity accounted investment (note 8) 1,402 - Restricted cash (note 9) 353 318 Capital assets, net 3,042 3,552

$ 339,645 $ 349,517

Liabilities and Shareholders' Equity

CurrentAccounts payable and accrued liabilities $ 3,752 $ 9,602 Income taxes payable 144 556

3,896 10,158

Long term tax payable 179 - Future tax liabilities 60,684 55,899

64,759 66,057

Shareholders' equityShare capital (note 11) 431,261 431,211 Warrants (note 12) 31,515 31,867 Contributed surplus (note 13) 58,150 54,497 Deficit (246,040) (234,115)

274,886 283,460

$ 339,645 $ 349,517

MEGA URANIUM LTD. Consolidated Balance SheetsAs at June 30, 2009 and September 30, 2008

3

Consolidated Statements of Operations and Deficit

(Unaudited- in thousands of dollars, except for securities and per share amounts)

2009 2008 2009 2008

Financial income (loss)Interest income $ 128 $ 569 $ 878 $ 2,425 Gains on disposal of marketable securities 72 - 49 - Realized gains (losses) on disposal of investments 182 (180) 65 (348) Unrealized gains (losses) on investments in public companies 2,995 (1,452) 2,030 (4,714) Unrealized gains (losses) on marketable securities (150) 35 (236) (624) Loss from equity investments (156) - (156) - Loss on sale of fixed assets - - (42) - Other income 206 - 262 -

3,277 (1,028) 2,850 (3,261) Expenses

Operating, general and administrative 3,343 2,518 8,978 7,516 Stamp duty recovery (note 17) - - (3,919) - Stock-based compensation (note 11(b)) 467 5,188 3,316 15,798 Foreign exchange loss 1,992 1,957 4,922 8,785 Write-down of mineral properties and related expenditures (note 4) 974 3,202 1,619 9,378 Amortization 219 195 617 394

6,995 13,060 15,533 41,871

Loss before income taxes (3,718) (14,088) (12,683) (45,132)

Provision for (recovery of) income taxes 71 (347) (758) (8,507)

Net loss and comprehensive loss for the period (3,789) (13,741) (11,925) (36,625)

Deficit, beginning of period (242,251) (61,467) (234,115) (38,583)

Deficit, end of period $ (246,040) $ (75,208) $ (246,040) $ (75,208)

Net loss per common share Basic & diluted $ (0.02) $ (0.07) $ (0.06) $ (0.20)

Weighted average number of common shares outstandingBasic & diluted 186,979,666 183,967,458 186,932,758 180,947,255

MEGA URANIUM LTD.

See accompanying notes to the consolidated financial statements.

For the three and nine months ended June 30,

Three Months Ended Nine Months Ended

4

For the three and nine months ended June 30,(In thousands of dollars, except for securities and per share amounts)

2009 2008 2009 2008

Cash flows from operating activitiesNet income (loss) for the period $ (3,789) $ (13,741) $ (11,925) $ (36,625) Items not affecting cash:

Realized gain on disposal of marketable securities (72) - (49) - Realized (gains) loss on disposal of investments (182) 180 (65) 348 Unrealized losses (gains) on investments in public companies (2,995) 1,452 (2,030) 4,714 Unrealized losses (gains) on marketable securities 150 (35) 236 624 Loss from equity investments 156 - 156 - Write down of mineral properties and related expenditures 974 3,202 1,619 9,378 Amortization 219 195 617 394 Stock-based compensation 467 5,188 3,316 15,798 Loss on sale of fixed assets - - 42 - Future tax recovery 71 (154) (578) (8,663) Foreign exchange loss 2,541 1,957 5,430 8,785

(2,460) (1,756) (3,231) (5,247) Changes in non-cash working capital balances

Prepaid expenses and sundry receivables 626 1,174 2,095 1,527Accounts payable and accrued liabilities (338) (296) (5,850) (4,605) Income taxes payable - 261 (412) (85)

(2,172) (617) (7,398) (8,410) Cash flows from financing activities

Proceeds pursuant to exercise of options and warrants 7 - 35 754 7 - 35 754

Cash flows from investing activitiesExpenditures on mineral properties and related exploration (4,730) (9,646) (11,312) (31,876)Deffered exploration expenditure (156) (156) Restricted cash - (29) - 9 Acquisition of Energentia - 9,245 - 9,245 Proceeds from sale of marketable securities 33,058 - 47,108 62,608 Purchase of marketable securities (23,852) (45,478) (23,852) (45,478) Amortization of premium on purchase of marketable securities (1,135) 7 (882) 225 Proceeds from sale of investments in public companies 1,887 757 1,964 2,000 Purchase of investment in Titan Uranium Inc - - (1,500) - Purchase of investments in public companies (3,729) (5,506) (5,486) (17,673) Proceeds from disposal of capital assets - - 104 - Purchase of capital assets (137) (1,327) (211) (3,729)

1,206 (51,977) 5,777 (24,669)

Increase (decrease) in cash and cash equivalents (959) (52,594) (1,586) (32,325)

Cash and cash equivalents, beginning of period 1,885 69,099 2,512 48,830

Cash and cash equivalents, end of period $ 926 $ 16,505 $ 926 $ 16,505

Supplemental Cash Flows InformationIssue of share capital pursuant to acquisitions of properties $ - $ 54 $ - $ 329

MEGA URANIUM LTD. Consolidated Statements of Cash Flows

Three Months Ended Nine Months Ended

Mega Uranium Ltd. Notes to the Consolidated Financial Statements

June 30, 2009

(Unaudited-in thousands of dollars, except for securities and per share amounts)

5

1. Basis of preparation: Mega Uranium Ltd. (“Mega” or the “Company”) is an exploration and development stage mineral resources company with a focus on uranium properties in Australia, Argentina, Colombia, Bolivia, Mongolia, Cameroon and Canada. Mega also has precious and base metal interests in Canada. Mega is in the process of exploring its mineral properties and has not as yet determined whether these properties contain reserves that are economically recoverable. The recoverability of the amounts shown for mineral properties and related expenditures is dependent upon: the selling price of uranium at the time the Company intends to mine its properties; the existence of economically recoverable reserves; the ability of the Company to obtain the necessary financing to complete exploration and development; government policies and regulations; and future profitable production or proceeds from disposition of such properties. Mega’s uranium properties in Queensland, Australia are subject to State policies, which presently prohibit the mining of uranium. These consolidated financial statements include the accounts of Mega and its subsidiaries including its direct wholly-owned subsidiaries: Maple Resources Inc.; Maple Minerals Exploration and Development Inc.; Uranium Mineral Ventures Inc. Mega Georgetown Pty Ltd.; Mega Hindmarsh Holdings Pty Ltd. (“Hindmarsh”); Mega Redport Holdings Pty Ltd.; Mega Uranium Argentina S.A.; Twenty-Seven Capital Corp. (“TSC”); Monster Copper Corporation (“Monster”); Nu Energy Uranium Corporation (“Nu Energy”); Northern Lorena Resources Ltd and Energentia Resources Inc. (“Energentia”). All significant inter-company accounts and transactions have been eliminated on consolidation. Management has prepared these unaudited interim consolidated financial statements in accordance with Canadian generally accepted accounting principles (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and notes required for annual financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. All references are in thousands of Canadian dollars unless otherwise noted.

2. Significant accounting policies:

Changes in accounting policies:

These interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the Company and notes thereto and for the year ended September 30, 2008. Accounting policies followed in the preparation of the annual consolidated financial statements are consistent with those used in the preparation of these interim consolidated financial statements except for the following:


June 30, 2009


6

2. Significant accounting policies (continued):

Effective October 1, 2008, the Company adopted the following new accounting standard issued by the Canadian Institute of Chartered Accountants (“CICA”): (i) Section 3064 – Goodwill and Intangible Assets which replaced CICA Handbook

sections 3062 and 3450, EIC 27 and part of Accounting Guideline 11. Under previous Canadian standards, more items were recognized as assets than under International Financial Reporting Standards (“IFRS”). The objectives of CICA 3064 are to reinforce the principle-based approach to the recognition of assets only in accordance with the definition of an asset and the criteria for asset recognition and to clarify the application of the concept of matching revenues and expenses such that the current practice of recognizing asset items that do not meet the definition and recognition criteria is eliminated. The portions in the new standard with respect to Goodwill remain unchanged. The provisions relating to the definition and initial recognition of intangible assets intends to reduce the differences with International Financial Reporting Standards in the accounting for intangible assets. The new standard also provides guidance for the recognition of internally developed intangible assets (including research and development activities), ensuring consistent treatment of all intangible assets. The adoption of this standard had no impact on the Company’s presentation of its financial position or results of operations for the three and nine months period ended at June 30, 2009.

(ii) Investments in Companies which Mega has significant influence over but does not

control (being investments held by Mega which constitute between 20% and 50% of an issuer’s outstanding voting shares) are accounted for using the equity method. Under the equity method, the investment is initially recorded at cost and the carrying value is adjusted thereafter to reflect the Company’s pro-rata share of post acquisition income or loss. The amount of adjustment is included in the determination of net income of the Company and the investment account of the Company is also increased or decreased to reflect the Company’s share of capital transactions and changes in accounting policies. The carrying value of the equity investment is regularly reviewed for possible impairment. When there is a loss in value that is other than a temporary decline, the investment is written down to recognize the loss.

(iii) On March 27, 2009, the Emerging Issues Committee of the CICA approved an

abstract EIC-174, “Mining Exploration Costs”, which provides guidance on capitalization of exploration costs related to mining properties in particular and on impairment of long-lived assets in general. The Company has applied this new abstract for the three and nine months ended June 30, 2009, and there was no significant impact on its consolidated financial statements as a result of applying this abstract.


June 30, 2009


7

2. Significant accounting policies (continued):

Recent accounting pronouncements:

In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with International Financial Reporting Standards (“IFRS”) over an expected five year transitional period. In February 2008, the AcSB announced that interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011 must be prepared in accordance with IFRS. The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended September 30, 2011. While the Company has begun assessing the impact of the adoption of IFRS for the year ended September 30, 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

3. Prior year acquisitions: During the fiscal year ended September 30, 2008 the Company acquired several of its subsidiaries and property interests as follows: (a). In October 2007, Mega entered into an option agreement with CanAlaska Uranium

Ltd. (“Can Alaska”) (TSX:”CVV”) in respect of CanAlaska’s 100% owned Poplar property, which is located on the northern rim of the Athabasca Basin of northern Saskatchewan, Canada. Mega could earn a 50% interest in the Poplar property by spending $6,000 and by issuing 100,000 of its common shares to CanAlaska over three years. Mega had a $2,000 expenditure commitment in the first year of the option and CanAlaska will initially operate the project. Mega could earn a further 5% interest (total 55% interest) by paying CanAlaska $2,000 and issuing an additional 100,000 common shares. An aggregate of 50,000 (valued at $127) were issued by Mega pursuant to the agreement. During the year ended September 30, 2008, the option was terminated and the expenditure was written off.

(b) In November 2007, Mega issued 16,667 common shares valued at $61 to optionors

pursuant to an option agreement entered into by TSC, Cash Minerals Ltd. and the optionors in respect of an option granted to TSC and Cash Minerals Ltd. to acquire a 100% interest in certain mineral claims located in Yukon, Canada. In connection with Mega’s acquisition of TSC, the optionors agreed to accept common shares of Mega in lieu of TSC common shares issuable under the option agreement.

(c) In January 2008, Mega issued 20,000 common shares in connection with a Saskatchewan property acquisition valued at $61.

(d) In February 2008, Mega issued 25,000 common shares in connection with the Lever

lake property pursuant to an option agreement valued at $62.


June 30, 2009


8

3. Prior year acquisitions (continued):

(e) On March 6, 2008, Mega entered into an agreement to acquire (“Energentia”), a

publicly-listed uranium exploration company with uranium properties in Colombia. Effective May 6, 2008, Mega acquired Energentia for an aggregate of 7,208,300 common shares of the Company valued at $14,849 and Energentia became a wholly-owned subsidiary of Mega. Additionally, an aggregate of up to 2,688,500 common shares of Mega were issuable pursuant to the exercise of outstanding stock options and common share purchase warrants of Energentia, which were assumed by Mega upon completion of the acquisition. The acquisition was accounted for using the purchase method. The results of operations of Energentia are included in the accounts from the effective date of acquisition. Details of the acquisition are as follows:

As at May 6, 2008 Purchase price Issuance of 7,208,300 Mega shares $ 14,849 Assumed Energentia warrants (i) 213 Assumed Energentia options (i) 448 $ 15,510Preliminary fair value of Energentia’s net assets acquired Current assets $ 9,573 Mineral properties and related expenditures 7,308 Capital assets, net 168 17,049 Less: current liabilities (370) Less: future tax liabilities (1,169)Fair value of net assets assumed $ 15,510

(i) An aggregate of 2,128,000 common share purchase warrants of Mega and

560,500 common shares of Mega were issuable to former shareholders of Energentia pursuant to the exercise of the Energentia Options and Energentia Warrants which were assumed by Mega in connection with the acquisition and which were included in the purchase price. During the current year, all of the assumed Energentia warrants expired unexercised. Similarly, all of the Energentia options were cancelled.

(f) In May 2008, Mega issued 25,000 common shares pursuant to an option agreement

for Maurice Point properties valued at $54.


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9

3. Prior year acquisitions (continued):

(g) In July 2008, Mega issued 25,000 common shares pursuant to an option agreement for Geomode properties valued at $50.

(h) In September 2008, Mega issued 25,000 common shares pursuant to an option agreement for Maurice Point properties valued at $31.

4. Mineral properties and related expenditures:

The Company enters into exploration agreements with other companies pursuant to which it may earn interests in mineral properties by issuing common shares and/or making option payments and/or incurring expenditures in varying amounts by varying dates. Failure by Mega to meet such requirements can result in a reduction or loss of the Company’s ownership interests or entitlements under the agreements.

The following is a detailed list of the Company’s mineral properties:

September 30,

2008

Net Book Value

Net Expenditures/ (Recoveries) Write off

Net Book Value

AUSTRALIA - QueenslandBen Lomond PropertyAcquisition 5,722$ -$ -$ 5,722 Exploration expenditures 3,497 933 - 4,430

9,219 933 - 10,152

Future Metals and Energy PropertiesAcquisition 10,230 - - 10,230 Exploration expenditures 1,773 115 - 1,888

12,003 115 - 12,118

Georgetown PropertiesAcquisition 6,413 - - 6,413 Exploration expenditures 3,758 90 - 3,848

10,171 90 - 10,261

Glengarry PropertiesAcquisition 674 - - 674 Exploration expenditures 706 45 - 751

1,380 45 - 1,425

Total Queensland properties 32,773 1,183 - 33,956

June 30, 2009


June 30, 2009


10

4. Mineral properties and related expenditures (continued):

September 30,

2008

Net Book Value Net Expenditures/

(Recoveries) Write off Net Book

Value

AUSTRALIA - South Australia & Northern TerritoryHindmarsh PropertyWestern South AustraliaAcquisition 3,670$ -$ 3,670$ Exploration expenditures 701 25 - 726

4,371 25 - 4,396 Central South AustraliaAcquisition 1,746 - - 1,746 Exploration expenditures 1,782 152 (997) 937

3,528 152 (997) 2,683 Eastern South AustraliaAcquisition 1 - - 1 Exploration expenditures 1,085 76 (76) 1,085

1,086 76 (76) 1,086 Northern TerritoryAcquisition 1,493 - - 1,493 Exploration expenditures 435 32 - 467

1,928 32 - 1,960

Total South Australia &Northern Territory properties 10,913 285 (1,073) 10,125

AUSTRALIA - Western AustraliaRedport Properties Lake Maitland (i)Acquisition 105,256 - - 105,256 Exploration expenditures 4,586 4,256 - 8,842

109,842 4,256 - 114,098 Kintyre RocksAcquisition 26,314 - - 26,314 Exploration expenditures 2,980 151 - 3,131

29,294 151 - 29,445 Aura Energy joint ventureAcquisition - - - - Exploration expenditures 1,382 2 - 1,384

1,382 2 - 1,384 Total Western Australian properties 140,518 4,409 - 144,927

Total Australian properties 184,204 5,877 (1,073) 189,008

June 30, 2009


June 30, 2009


11


September 30,

2008

Net Book Value Net Expenditures/

(Recoveries) Write off Net Book Value

ARGENTINAChubut/Patagonia PropertyAcquisition 147$ -$ -$ 147$ Exploration expenditures 2,920 754 - 3,674

3,067 754 - 3,821 Sierra Pintada District Uranium PropertyAcquisition 75 - - 75 Exploration expenditures 35 103 - 138

110 103 - 213

Total Argentina properties 3,177 857 - 4,034

BOLIVIAUranium Project (Intrepid Minerals joint venture)Acquisition 58 - - 58 Exploration expenditures 509 233 - 742

567 233 - 800

COLOMBIAAcquisition 131 - - 131 Exploration expenditures 811 506 - 1,317

942 506 - 1,448

COLOMBIAEnergentia PropertiesAcquisition 7,408 (100) - 7,308 Exploration expenditures 919 563 - 1,482

8,327 463 - 8,790

MEXICOTwenty-Seven PropertiesAcquisition 546 - (546) - Exploration expenditures - - - -

546 - (546) -

June 30, 2009


June 30, 2009


12


September 30,2008

Net Book Value

Net Expenditures/ (Recoveries) Write off

Net Book Value

MONGOLIAUranium Project (Red Hill Energy joint venture)Acquisition 98$ -$ -$ 98$ Exploration expenditures 1,885 36 - 1,921

1,983 36 - 2,019

CAMEROON (AFRICA)Kitongo/Lolodorf PropertyAcquisition 34,572 - - 34,572 Exploration expenditures 782 2,627 - 3,409

35,354 2,627 - 37,981

CANADAOntario Properties (East West Resources joint venture)Acquisition 64 25 - 89 Exploration expenditures 1,500 81 - 1,581

1,564 106 - 1,670

Central Mineral Belt Properties (Santoy)Acquisition 2,447 - - 2,447 Exploration expenditures 983 21 - 1,004

3,430 21 - 3,451

Thelon Basin (Titan Uranium)Acquisition - 18 - 18 Exploration expenditures 5,000 151 - 5,151

5,000 169 - 5,169

June 30, 2009


June 30, 2009


13


September 30,2008

Net Book Value

Net Expenditures/ (Recoveries) Write-off Net Book Value

CANADA (continued)

Geomode Properties - Keefe LakeAcquisition 643$ -$ -$ 643$ Exploration expenditures 2,212 19 - 2,231

2,855 19 - 2,874

South Fork Properties (Uranium Power)Acquisition 7 - - 7 Exploration expenditures 1,231 364 - 1,595

1,238 364 - 1,602

Maurice Point Properties (Forum Uranium)Acquisition 86 25 - 111 Exploration expenditures 3,829 113 - 3,942

3,915 138 - 4,053

Twenty-Seven Yukon PropertiesAcquisition 20,118 - - 20,118 Exploration expenditures 208 (98) - 110

20,326 (98) - 20,228

Monster Labrador PropertiesAcquisition 5,049 (179) - 4,870 Exploration expenditures 4,627 173 - 4,800

9,676 (6) - 9,670

Total Canadian properties 48,004 713 - 48,717

Total mineral properties and 283,104$ 11,312$ (1,619)$ 292,797$ related expenditures

June 30, 2009


June 30, 2009


14


(i) The following transaction took place during the nine months ended June 30, 2009.

Farm –in and joint venture agreement:

On February 27, 2009, the Corporation announced that it had entered into a non-binding memorandum of understanding with the Japan Australia Uranium Resources Development Co. Ltd. (JAURD) and ITOCHU Corporation (ITOCHU) whereby JAURD and ITOCHU will farm-in and joint venture with the Corporation on its Lake Maitland project, Western Australia, for aggregate payments of US$49 million in order to earn an aggregate 35% interest in the Lake Maitland Project. JAURD is a Japanese company mandated to acquire uranium resources in Australia on behalf of its shareholders, being three Japanese utilities -- The Kansai Electric Power Company, Incorporated (50%), Kyushu Electric Power Company, Incorporated (25%) and Shikoku Electric Power Company, Incorporation (15%) -- and ITOCHU Corporation (10%), one of the world’s largest uranium trading houses. On June 18, 2009, the Corporation announced that it had entered into final joint venture and farm-in agreements with the Japan Australia Uranium Resources Development Co. Ltd. (JAURD) and ITOCHU Corporation (ITOCHU) whereby JAURD and ITOCHU will farm-in and joint venture with the Corporation on its Lake Maitland project, Western Australia, for aggregate payments of US$49 million in order to earn an aggregate 35% interest in the Lake Maitland Project. The agreements remain subject to approvals required under the Foreign Acquisitions and Takeovers Act 1975 and related Australian regulatory approvals and completion of formal documentation. Subsequent to June 30, 2009, no objection was received from Foreign Investment Review Board for JAURD/ITOCHU investment in the Lake Maitland uranium mine development in Western Australia.

(ii) During the second quarter, Mega abandoned certain tenements that were part of the

Hindmarsh properties ($99) and withdrew from the Twenty Seven properties in Mexico ($546). As a result, mineral properties and related expenditures include a write-off of $645.

(iii) During the current quarter, Mega wrote down properties that were part of the Hindmarsh

properties ($974) located in Central South Australia. As a result, mineral properties and related expenditures include a write-off of $974.


June 30, 2009


15

5. Cash and cash equivalents:

Cash and cash equivalents consist of the following:

June 30, 2009 September 30, 2008 Cash $ 926 $ 2,226Cash equivalents (a) - 286

$ 926 $ 2,512

(a) As at September 30, 2008 cash equivalents consisted of money market funds, which were sold during the period ended June 30, 2009.

6. Marketable securities:

Marketable securities are classified as held-for-trading, are stated at their fair values and consist of the following as at:

June 30, 2009 September 30, 2008

Corporate bonds (a) $ 23,060 $ 46,101Other equity securities (b) 282 411

$ 23,342 $ 46,512 (a) As at June 30, 2009, corporate bonds consist of highly liquid “A+” bonds with yields

ranging from 4.08% to 4.99% with the weighted average yield being approximately 4.66% and with maturity dates from April 30, 2012 to March 27, 2013.

(b) As at June 30, 2009, equity securities were held by the Company’s Australian

subsidiaries.


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16

7. Investments in public companies:

Investments consisted of the following as at June 30, 2009:

Investments Security Description Cost Fair Value Northern Uranium Limited 2,260,520 common shares

1,250,000 options expiring December 12, 2009 $ 406 $ 362

Cauldron Energy Limited 3,750,000 common shares 2,284 1,141Alberta Star Development Corp. 7,000,000 common shares 3,118 1,295Bayswater Uranium Corporation 11,000,000 common shares 4,807 1,705Colossus Minerals Inc. 31,250 common shares 31 88Ditem Explorations 5,000,000 common shares 1,991 475East West Resource Corporation Khan Resources Inc.

200,000 common shares 3,500,000 common shares

6 2,054

4 1,523

Mawson Resources Limited 2,091,000 common shares 1,646 962Greenland Minerals & Energy Ltd. 8,679,775 common shares 5,231 2,926Ucore Uranium Inc. 4,000,000 common shares 1,520 1,000Alderon Resource Corp 500,000 common shares 50 17Aroway Mineral Inc. 125,000 common shares 100 16Longharbour Capital 40,000 common shares 14 2Tournigan Gold Corp 2,000,000 common shares 946 630Southern Gold Ltd 100,000 common shares 13 9Macusani Yellowcake Inc 2,000,000 common shares 1,000,000 warrants expiring May 22, 2011 500 500

Total investments in public companies $ 24,717 $ 12,655 Investments consisted of the following as at September 30, 2008:

Investments Security Description Cost Fair Value Northern Uranium Limited 2,260,520 common shares 1,250,000 options expiring December 12, 2009 $ 406 $ 409Scimitar Resources Limited 3,750,000 common shares 2,284 628Alberta Star Development Corp. 5,896,800 common shares 2,917 1,002 Bayswater Uranium Corporation. 8,678,500 common shares 4,408 1,215 Colossus Mineral Inc. 93,750 common shares 94 159Ditem Explorations 3,955,100 common shares 1,820 930Khan Resources Inc. 752,000 common shares 963 346Mawson Resources Limited 1,594,500 common shares 1,460 550Greenland Minerals & Energy Ltd 4,000,000 common shares 4,458 905Silver Spruce Resources Inc. 142,500 common shares 240 14Santoy Resources Limited 200,000 common shares 196 26Titan Uranium Inc 500,000 common shares 322 95Ucore Uranium Inc 4,000,000 common shares 1,520 580Alderon Resource Corp 500,000 common shares 50 115Action Mineral Inc 5,000,000 common shares 100 50Longharbour Capital 40,000 common shares 14 14

Total investments in public companies $ 21,252 $ 7,038


June 30, 2009


17

8. Equity accounted investment:

During the period ended June 30, 2009, the Company acquired 13,500,000 shares of Titan Uranium Inc. (“Titan”). Together with 280,500 shares of Titan previously acquired by Mega, the Company holds an aggregate of 13,780,500 common shares of Titan representing a 26.01% interest in Titan’s issued and outstanding common shares.

June 30, 2009

September 30, 2008

Equity accounted investment-carrying value, beginning of period

$ - $ -

Purchase of equity accounted investments 1,558 - Income (loss) from equity accounted investment (156) - Equity accounted investments-carrying value, end of period

$ 1,402 $ -

9. Restricted cash:

As at June 30, 2009, the Company had pledged approximately $328 (2008 - $293) of cash held in a Guaranteed Investment Certificate (“GIC”) as collateral for a letter of guarantee issued to the State of Queensland, Australia, related to the mining leases for the Ben Lomond uranium project. The letter of guarantee is automatically renewable annually for an indefinite period of time and, accordingly, the pledged GIC is expected to continue to be renewed annually. In connection with the acquisition of TSC, the Company has $25 (2008- $25) of cash held in a GIC as collateral for a reclamation bond issued to the Province of British Columbia, Canada, related to the mining properties for the Muskwa uranium project. The letter of guarantee is automatically renewable annually for an indefinite period of time and, accordingly, the pledged GIC is expected to continue to be renewed annually.

10. Related party transactions:

All transactions with related parties have occurred in the normal course of operations and are recorded at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related party transactions were as follows during the nine months ended June 30:

Type of service Nature of relationship 2009 2008 Cost sharing arrangement Affiliated company (a) $ 331 $ 368 Investments in public companies Affiliated company (b) $ 1,348 $ 12,816 Equity accounted investment Affiliated company (c) $ 1,500 $ - (a) The Company has a cost sharing arrangement with Pinetree Capital Ltd. (“Pinetree”)

(TSX:”PNP”), which is also a shareholder of the Company with a common director


June 30, 2009


18

10. Related party transaction (continued):

and officers, covering specific operating, general and administrative expenses, including office rent and salaries.

(b) During the nine months ended June 30, 2009, the Company bought certain of its investments in public companies at market prices from Pinetree. Total cost of the investments was $1,348.

(c) During the period, the Company bought 13,500,000 shares of Titan Uranium Inc.

(“Titan”) for total consideration of $1,500 from Dejour Enterprises Ltd (TSXV: DEJ) a company with a director who is also an officer of Mega.

11. Share capital:

(a) Share capital: Authorized: unlimited number of common shares. Common shares issued and outstanding:

# of Shares Amount Balance, September 30, 2007 179,117,602 417,070Issued pursuant to exercise of share purchase and broker warrants 28,384 175Issued for acquisition of subsidiary 7,308,360 15,285Issued for acquisitions of properties 186,667 447Issued pursuant to the exercise of Monster warrants 180,463 1,268Issued pursuant to the exercise of Nu Energy options 83,333 390Renunciation of flow-through expenditures — (3,424)Balance, September 30, 2008 186,904,809 $ 431,211Issued pursuant to exercise of options 81,000 $ 50Balance, June 30, 2009 186,985,809 $ 431,261

i) During the period ended June 30, 2009, Mega issued 81,000 common shares upon

the exercise of 81,000 options at prices of between $0.38 and $1.03 per share for a total proceeds of $35. As a result of the exercise of the options, an aggregate amount of $15 was reallocated from contributed surplus to share capital.

(b) Stock option plans:

The Company grants options to directors, officers, employees and consultants under its 2007 Stock Option Plan to enable them to purchase common shares of the Company. The plan is administered by the Board of Directors. Under the plan, the Company is authorized to issue up to that number of common shares of Mega equal to 10% of the number of common shares outstanding from time to time. The term of an option granted under the plan may not exceed 10 years.


June 30, 2009


19

11. Share capital (continued):

Stock option grants have a variety of vesting periods, almost all of which vest in three-month intervals over an 18-month period from the date of grant. There were no options granted during the nine months ended June 30, 2009 which have a vesting period other than aforementioned. A summary of the status of the Company’s stock options outstanding as at June 30, 2009 and September 30, 2008 and changes during the periods then ended is presented below:

June 30, 2009 September 30, 2008

# of Options

Weighted average exercise price

# of Options

Weighted average exercise price

Outstanding, at beginning of period 16,994,469 $ 4.64 15,367,840 $ 4.73Granted 2,450,000 1.03 1,730,000 3.01 Exercised (81,000) (0.43) - - Cancelled (1,457,629) (5.50) (663,871) (4.84) Assumed Energentia stock options _ _ 560,500 7.50 Outstanding, at end of period 17,905,840 4.09 16,994,469 4.64

Exercisable, at end of period 15,641,190 $ 4.51 14,909,089 $ 4.73


June 30, 2009


20


The following table summarizes information about stock options outstanding and exercisable as at June 30, 2009:

Number of options outstanding

Number of options exercisable

Exercise price Expiry date

1,700 1,700 0.25 September 22, 2009 10,000 10,000 0.25 September 26, 2009 20,000 20,000 0.25 December 20, 2009 60,000 60,000 0.41 February 14, 2010

100,000 100,000 0.41 February 17, 201010,040 10,040 0.75 February 28, 201050,000 50,000 0.70 March 16, 201016,800 16,800 0.85 September 12, 2010

115,200 115,200 1.38 October 2, 2010600,000 600,000 1.35 October 10, 201050,200 50,200 1.71 November 17, 2010

208,400 208,400 2.50 January 2, 20112,000,000 2,000,000 2.95 February 19, 2011

160,000 160,000 3.43 March 15, 2011270,000 270,000 4.90 April 12, 2011

3,170,000 3,170,000 4.45 April 23, 2011200,000 200,000 4.00 May 10, 2011195,100 195,100 3.78 September 18, 2011 50,000 50,000 3.78 September 25, 2011

720,000 720,000 5.97 December 27, 2011 2,125,000 2,125,000 6.46 January 15, 2012

50,000 50,000 6.48 February 4, 20122,295,000 2,295,000 6.87 May 21, 2012

200,000 200,000 6.10 June 6, 2012200,000 200,000 6.05 July 12, 2012

1,350,000 1,350,000 3.90 September 20, 2012 345,000 345,000 4.30 November 15, 2012 100,000 100,000 2.90 December 17, 2012 350,000 291,240 2.34 February 17, 2013290,000 192,400 2.38 April 7, 2013

5,000 2,490 2.31 July 1, 2013 175,000 87,300 1.63 September 1, 2013

2,413,400 395,320 1.03 March 1, 2014

17,905,840

15,641,190


June 30, 2009


21


These stock options were issued to employees, directors, and consultants and in accordance with CICA 3870, were accounted for using the fair value method and expensed over the option’s vesting periods in the consolidated statements of operations and deficit and credited to contributed surplus.

In accordance with CICA 3870, the fair value of stock options granted to employee’s directors and consultants during the period was estimated at the date of the grant using the Black-Scholes Option Pricing Model. The expected life of an option of the Company is 3.5 years with an expected dividend yield of 0% since the Company has never paid dividends. Volatility is calculated using three and a half years of share data prior to the date the option was granted. The Company uses the Bank of Canada bank rate as the risk-free interest rate. Following are the assumptions used for the options granted during the nine months ended June 30, 2009:

Black-Scholes assumptions

Exercise price

Market price on day of

grant

Expected volatility 80.3% Expected dividend 0.00% Risk-free interest rate 1.25% Expected option life in years 3.5 years Fair value of stock options granted on March 2, 2009 $ 0.57 $ 1.03 $ 1.03

For the nine months ended June 30, 2009, included in the consolidated statement of operations and deficit was stock-based compensation expense of $308 (2008 – $1,072) relating to the fair value of options granted during current period and $3,008 (2008-$14,726) relating to the fair value of stock option granted during prior periods.


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22

12. Warrants:

A summary of the status of the Company’s warrants as at June 30, 2009 and September 30, 2008 and changes during the periods then ended is presented below:

# of Warrants Weighted

average exercise price

Warrant value using Black-Scholes valuation ($)

Balance, September 30, 2007 14,487,613 6.38 41,768Exercised (28,384) (4.25) (54)Monster warrants exercised (180,463) (2.82) (759)Expired warrants (4,308,640) (5.99) (6,155)Assumed Energentia warrants 2,128,000 0.10 213Expired Monster warrants (858,247) (3.67) (3,146)Balance, September 30, 2008 11,239,879 $ 6.92 $ 31,867Expired Energentia warrants (2,128,000) 7.50 (213) Expired warrants (85,000) 4.55 (139)Balance, June 30, 2009 9,026,879 $ 6.81 $ 31,515

The following table summarizes the warrants outstanding as at March 31, 2009:

(i) If the closing price of Mega’s shares exceeds $12.30 for 20 consecutive days, the

warrants will expire 30 days following written notice to the holders of the warrants.

(ii) In connection with the acquisition of TSC, these warrants have been fair valued

using the closing quoted bid price of the publicly-traded warrants. (iii) In connection with the acquisition of Monster, these warrants have been fair

valued using an average of quoted bid prices of the publicly-traded warrants.

Number of warrants Exercise price ($) Expiry date

Warrant value using Black-Scholes valuation ($)

3,392,188 6.00 February 12, 2012 (ii) 14,145 50,000 6.00 February 12, 2012 (ii) 208

1,900,000 7.90 February 22, 2012 (i) 7,695 3,684,416 7.00 June 6, 2012 (iii) 9,467 9,026,879 $ 31,515


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13. Contributed surplus :

Contributed surplus transactions for the respective periods are as follows:

AmountBalance, September 30, 2007 26,550Stock-based compensation 18,544 Exercise of Nu Energy stock options (265)Expired warrants 6,155 Adjustment to assumed Nu Energy options (81)Assumed Energentia stock options (a) 448 Expired Monster warrants 3,146 Balance, September 30, 2008 $ 54,497Stock based compensation 3,316Expired Energentia warrants 213Expired warrants 139Exercised stock options (15)Balance, June 30, 2009 $ 58,150

(a) In connection with the acquisition of Energentia, these Energentia options were

valued using the Black-Scholes option pricing model with the following assumptions: expected volatility ranging from 91.9% to 93.9%; dividend yield of 0%; risk-free interest rate of 3.25%; and an expected life varying from 46 to 49 months. The value assigned to the Energentia options was $448.

14. Segmented information :

The Company’s significant segments include four distinct geographic areas. The Canadian operations, which are mainly in Ontario, Yukon Territory, Saskatchewan and Newfoundland and Labrador, are managed from the Company’s head office in Toronto. The Australian operations are managed from offices in Brisbane, Adelaide and Perth. The South American operations are located in Colombia, Argentina and Bolivia and are managed from the Mendoza (Argentina) office, under the overall supervision of the Brisbane office. In Asia, Mega’s joint venture interests in Mongolia are locally managed by its joint venture partner, Red Hill Energy, under the overall supervision of the Brisbane office. In Cameroon, exploration activities are locally managed from an office in Yaounde under the overall supervision of the Brisbane office.


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14. Segmented information(continued):

The following is segmented information as at and for the three and nine months ended June 30, 2009:

Three months

ended June 30,

2009

Nine months

ended June 30, 2009

Three months ended

June 30, 2009

Nine months

ended June 30,

2009

As at June 30, 2009

Country/Region Financial

income (loss)

Financial income (loss)

Net Income (loss)

Net Income (loss)

Future tax liabilities

Capital assets

Mineral properties and

related expenditures

Canada $ 3,198 $ 2,914 $ 1,301 $ (4,024) $ 7,119 $ 95 $ 48,717 Australia 80 (30) (5,051) (3,896) 38,632 1,341 189,008

Central and South America 3 11 (453) (1,014) 1,098 172 15,072 Asia and Africa (4) (45) 414 (2,991) 13,835 1,434 40,000 Total $ 3,277 $ 2,850 $ (3,789) $ (11,925) $ 60,684 $ 3,042 $ 292,797

The following is segmented information as at and for the three and nine months ended June 30, 2008:

Three months ended

June 30, 2008

Six months ended

June 30, 2008

Three months ended

June 30, 2008

Six months ended June 30,2008

As at June 30, 2008

Country/Region Financial income (loss)

Financial income (loss)

Net loss Net loss

Future

tax liabilities

Capital assets

Mineral properties and related

expenditures Canada $ (1,070) $ (2,725) $ (10,396) $ (20,402) $ 46,060 $ 109 $ 176,933 Australia 46 (587) (2507) (9,382) 50,859 1,371 199,550

Central and South America 7 7 (9) (37) 1,050 216 12,382 Asia and Africa (11) 44 (829) (6,804) 43,315 3,024 109,297

Total $ (1,028) $ (3,261) $ (13,741) $ (36,625) $ 141,284 $ 4,720 $ 498,162

The Company has no inter-segment revenues.


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15. Management of capital:

The Company includes the following in its capital:

As at June 30,

2009 As at September 30,

2008 Shareholders’ equity comprised of

Share capital $ 431,261 $ 431,211Warrants 31,515 31,867 Contributed surplus 58,150 54,497Deficit (246,040) (234,115)

$ 274,886 $ 283,460

The Company’s objectives when managing capital are:

(a) To maintain the necessary financing to undertake exploration and development of its properties in accordance with its plans;

(b) To realize proceeds from sale of one or more of its properties;

(c) Maximizing the income it receives from cash & cash equivalents without significantly

exposing the principal by placing investments with high credit quality issuers; and

(d) To maintain a flexible capital structure which optimizes the cost of capital at acceptable levels of risk.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its underlying assets. The Company maintains or adjusts its capital level to enable it to meet its objectives by:

• realizing proceeds from the disposition of its investments;

• raising capital through equity financings;

• reviewing and, when necessary or desirable, reallocating or reducing capital spending

on mineral properties. The Company is not subject to any capital requirements imposed by a regulator. To date, the Company has not declared any cash dividends to its shareholders. The Company’s management is responsible for the management of capital and reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company expects that its current capital resources will be sufficient to discharge its liabilities as at June 30, 2009.


June 30, 2009


26

16. Financial instruments:

Part of Mega’s business includes the acquisition of marketable securities and equity investments in public companies. These assets represent a small portion of the Company’s overall business; however, the use of financial instruments can expose the Company to several risks, including interest rate, foreign exchange and market risks. A discussion of the Company’s use of financial instruments and their associated risks is provided below. (a) Liquidity risk: Liquidity risk is the risk that the Company will have sufficient cash

resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if the Company’s access to the capital market is hindered, whether as a result of downturn in stock market conditions generally or related to matters specific to the Company, or if the value of the Company’s investment declines, resulting in lesser proceeds of disposition and losses upon disposition. The Company generates cash flow primarily from its financing activities and proceeds from disposition of its investment and marketable securities, in addition to interest income earned on its investment. The Company has cash and cash equivalents and marketable securities of approximately $24,268. The marketable securities are invested in highly liquid “A+” bonds (see note 6). The funds are available as needed to fund the Company’s ongoing expenditures. The Company regularly evaluates these holdings to ensure preservation and security of capital as well as maintenance of liquidity.

(b) Market risk: Market risk is the risk that the fair value of, or future cash flows from,

the Company’s financial instruments will significantly fluctuate due to changes in market prices. The value of the financial instruments can be affected by changes in interest rates, foreign exchange rates, and equity and commodity prices. In the normal course of business, the Company is exposed to market risks as a result of its investments in publicly-traded companies. During periods of significant broader market volatility or volatility experienced by the resource/commodity markets, the value of the Company’s investment portfolio can be vulnerable to market fluctuations.

The following table shows the estimated sensitivity of the Company’s after-tax net income (loss) for the period ended June 30, 2009 from a change in the closing bid price of the Company’s investments in public companies with all other variables held constant as at June 30, 2009:


June 30, 2009


27

16. Financial instruments (continued):

(c) Interest rate risk: Interest rate risk is the impact that changes in interest rates could

have on the Company’s earnings and liabilities. In the normal course of business, the Company is exposed to interest rate fluctuations as a result of the significant portion of marketable securities being invested in interest-bearing instruments.

The following table shows the estimated sensitivity of the Company’s net after-tax income (loss) for the period ended June 30, 2009 from a change in the interest rate on the average interest risk assets with all other variables held constant as at June 30, 2009:

Change in Interest Rate

Change in Net After-tax Income (Loss) From an Increase in Interest Rate

Change in Net After-tax Income (Loss) From a Decrease in Interest Rate

0.25% $ 29 $ (29) 0.50% 58 (58) 0.75% 87 (87) 1.00% 116 (116)

(d). Currency risk: Currency risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency fluctuations as it presently holds funds in Canadian dollars and a significant amount of its costs and liabilities are denominated in Australian and other currencies. The Company believes it is not significantly exposed to foreign exchange risk and has not entered into any foreign currency contracts to hedge this exposure. The following table shows the estimated sensitivity of the Company’s net after-tax income (loss) for the period ended June 30, 2009 from a change in all foreign currencies (Australian dollars, South Africa rand, Cameroon franc and U.S. dollars) with all other variables held constant as at June 30, 2009:

Percentage of Change in Closing Bid Prices

Change in Net After-tax Income (Loss) From % Increase in Closing Bid Price

Change in Net After-tax Income (Loss) From % Decrease in Closing Bid Price

2% $ 211 $ (211) 4% 422 (422) 6% 633 (633) 8% 844 (844) 10% 1,055 (1,055)


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28

16. Financial instruments (continued):

(e) Credit risk: Credit risk is the risk of loss associated with a counter-party’s inability to fulfill its payment obligations. The Company has its cash and cash equivalents deposited with highly rated financial institutions. Other credit risk relates to trade receivables in the ordinary course of business. The balance of trade receivables owed to the company in the ordinary course of business is not significant. The Company holds corporate bonds issued by Canada’s Schedule A banks. They are highly liquid “A+” bonds and the Company believes that the credit risk associated with these bonds is minimal.

(f) Fair value:

The Company has determined the fair value of its financial instruments as follows:

(i) The carrying values of cash and cash equivalents, prepaids and other

receivables, accounts payable and accrued liabilities, approximate their fair values due to the short-term nature of these instruments.

(ii) Investments and capital assets are carried at amounts in accordance with the

Company’s accounting policies.

The total amount of the change in fair value of the Company’s financial instruments recognized in income for the nine months ended June 30, 2009, and the total amount of unrecognized gains and losses on its financial instruments, are discussed elsewhere in this financial statement.

17. Stamp Duty Recovery:

In fiscal 2008, the Company accrued $5,119 of stamp duty expenses related to its acquisition of Redport Ltd. In the current period, the Company received a notice of assessment from the Western Australian office of state revenue with a final stamp duty assessment of $1,200. The $3,919 difference is reflected in the current period as a reversal of the prior period accrual.

Percentage of Change in Foreign Currencies

Change in Net After-tax Income (Loss) From % Increase in Foreign Currencies

Change in Net After -Tax Income (Loss) From %Decrease in Foreign Currencies

2% $ 841 $ (841) 4% 1,682 (1,682) 6% 2,523 (2,523) 8% 3,364 (3,364) 10% 4,205 (4,205)


June 30, 2009


29

18. Subsequent Events:

Mega presently holds 26.01% of the outstanding voting shares of Titan and accounts for its investment using the equity method. On May 8, 2009, Titan entered into a business combination agreement with Uranium Power Corp. (“UPC”) whereby Titan would acquire all of the issued and outstanding shares of UPC (the “Transaction”) in exchange for shares of Titan. The Transaction was approved by UPC’s shareholders at a meeting of the shareholders held on July 23, 2009, and is subject to regulatory approval. If the transaction is completed, it is expected that Titan will issue approximately 52,980,000 shares to acquire all of the UPC shares, following which Mega will no longer account for its investment in Titan using the equity method. Mega’s aggregate investment in Titan will decrease to approximately 13%.

19. Comparative Consolidated financial statements: The Comparative consolidated financial statements included herein have been reclassified

from statement previously presented to confirm to the presentation of the June 30, 2009 consolidated financial statements.

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