Sedex Zinc-lead-silver Project in BC

SEDEX Zinc Project

SEDEX zinc-lead-silver property is located in the Omineca Mining Division, approximately 280 kilometers north-northwest of Mackenzie, BC, Canada. The Property is situated within the highly prospective Gunsteel shale formation in the world-class Kechika trough sedex zinc basin and consists of 33 mineral claims covering 22,400 hectares (224 sq. km). The Property includes 5,630 meters of active zone in favorable Gunsteel shale formation located adjacent to and along strike with geology that hosts several zinc deposits, including TeckCominco Ltd./Korea Zinc Company’s Cirque and South Cirque Deposits, and Canada Zinc Metals Corp.’s Cardiac Creek Deposit on their Akie property (with NI 43-101 inferred resources of 23.6 million tonnes grading 7.6% Zn, 1.5% Pb and 13.0 g/t Ag at a 5% Zn cut off grade).

The Company's claims cover part of the highly prospective Gunsteel shale formation in the regionally extensive, world-class Kechika trough SEDEX zinc basin of Northern British Columbia. The Kechika trough is geologically similar and comparable in size and economic potential to the Red Dog basin of Alaska, where Teck-Cominco operates and controls the world's largest zinc/lead mine.

Megastar granted Rio Grande Mining Corp. ("Rio Grande"), a private British Columbia corporation, an option to earn up to 60% interest. Under the terms of the Option Agreement with Rio Grande, Megastar will be paid, in stages, total of $70,000 cash and issued 200,000 common shares in the capital of Rio Grande on or before July 31, 2012. In addition to these payments, Rio Grande will also be required to incur exploration expenditures on the property totaling $2.0 million over the ensuing 36 months (of which $100,000 must be expended on or before January 31, 2009), to earn a 60% interest in the property.

In the event that Rio Grande completes the Option Agreement in accordance with the terms set forth then Rio Grande will have earned a 60% interest in the Property, after which a joint venture would be formed (60 per cent Rio Grande and 40 per cent Megastar).