Novastar Resources Ltd., a commercial mining firm engaged in the exploration of Thorium and Rare Earth Metals, has announced the acquisition of Thorium mineral rights from Alabama-based American Graphite Holdings Ltd. ("AGH Ltd."). Under terms of the agreement, effective September 01, 2005, Novastar has been granted mineral rights to both stockpiles and in-ground reserves of Thorium and Monazite, the Thorium bearing Phosphate (Rare Earth) mineral, found on AGH Ltd.'s property of over 3,300 acres in Clay County, Alabama.

In addition, Novastar Resources retains the mineral rights for these AGH Ltd. properties for a period of 99 years, and has the authority to assign these rights to a third party if the Company so chooses. Should Novastar commercially exploit these properties, a royalty shall be tendered to American Graphite Holdings, on a per ton basis. Geophysical data and estimates of potentially recoverable Thorium/Monazite reserves will be forthcoming at a future date.

"This is a major milestone for Novastar, as we continue the aggressive pursuit of domestic Thorium stockpiles and properties," said Paul Carter, President of Novastar Resources. "Novastar intends to position itself as a major global supplier of Thorium, to capitalize on an anticipated surge in demand for Thorium as a source of peaceful nuclear energy."

"I share the belief that future Thorium utilization is inevitable. We are very pleased to work with Novastar to successfully exploit the extensive Thorium, Monzanite and Monazite material within the Clay County properties," said AGH Ltd. President Dr. Charles Merchant.

Clay County, Alabama is host to a number of comprehensive mining operations, so an excellent infrastructure exists, such as electrical power, roads, railways and interstate highways, which can support future commercialization.

There is increasing interest in utilizing Thorium as a nuclear fuel because Thorium is a more efficient nuclear fuel and far less radioactive than Uranium. Also, all of the mined Thorium is potentially useable in a reactor, compared with the 0.7% of natural uranium, so some 40 times the amount of energy per unit mass might be available. Therefore, the thorium fuel cycle, with its potential for breeding fuel without the need for fast-neutron reactors, holds considerable potential long-term. It is a key factor in the sustainability of nuclear energy. – Press Release