August 25, 2008
Update on Blue Sky's Ongoing Exploration of the Santa Barbara Uranium Project in Patagonia, Argentina

Blue Sky Uranium Corp. (BSK-TSX.V) is pleased to provide an update from the Company's ongoing surface exploration program on the Santa Barbara uranium project in Rio Negro province, Argentina. Phase I surface exploration has been completed on three parallel radiometric anomalies measuring 11 km, 6.5 km and 5 km in length and up to 1.5 km in width. These mineralized trends are characterized with abundant visible yellow uranium mineralization near surface. Augur sampling, spectrometer surveys, radon soil gas surveys and geological mapping confirm the presence of a widespread near-surface horizon of uranium mineralization in poorly consolidated Cretaceous sediments. Uranium assays of 52 mineralized composite samples from six hand-augered holes in a newly discovered mineralized trend are expected soon and will be released when available.

"Our ongoing investigation has significantly enlarged the area of known Colorado Plateau-type uranium mineralization in the Santa Barbara project with discovery of a fourth mineralized trend. A near-surface, flat-lying horizon of mineralization up to 2 m in thickness occurs throughout the project area. Geological investigation suggests that this surface mineralized horizon is the uppermost in a stacked sequence of paleo-channels which could very likely host additional mineralization at depth," said Blue Sky's COO, Dr. Clifton W. Farrell.

A radon gas survey consisting of 1,500 stations has been completed over the three anomalies that were identified through a radiometric survey that was completed in 2007. The radon gas survey returned high Rn222 concentrations closely correlate with the limits of the three radiometric anomalies. Limited hand auger sampling to a maximum depth of 7 metres in 6 holes has intersected uranium mineralization at a depth of 50 cm ranging in thickness from 10 cm to 2 metres. Further surface auguring on a 200m regular grid is now in progress to define the depth, thickness, continuity and grade of uranium mineralization in zones of high uranium concentrations.

The Company's autumn 2008 exploration program will include more extensive auguring and sampling of surface strata to assess the depth, thickness, continuity and grade of the near-surface uranium (and vanadium) mineralization. Further radon soil gas surveys will continue to better define fault traces and to identify mineralization that does not display an airborne survey footprint. Sampling and analysis of water sources (springs, wells, seeps) for uranium and radon is planned both as an exploration tool and to develop a baseline environmental database. Results of these surveys will be used to delineate drilling targets for the anticipated Q4 2008 drilling program(s).

Technical Summary

The mineralization at Santa Barbara, which typically occurs at a depth of 50cm and has a maximum measured thickness of 2m, coats the sediment grains, appears typical of Colorado Plateau-type uranium deposits and is often associated with petrified wood. Limited, preliminary chemical assays show uranium present at 0.1-0.25% U, values that are consistent with earlier exploration results. The bright yellow colour of the mineralization and its elevated vanadium content (to 500 ppm V) suggest that the mineralization is primarily carnotite.

Radon soil, gas surveys show elevated values over each anomaly, although some displacement from the radiometric anomalies is apparent, perhaps due to groundwater transport. Zones of elevated radon emissions tend to be linear and parallel regional faulting. Ground radiometric surveys show elevated uranium (and frequently potassium) concentrations in zones of higher radon concentrations.

Geologic mapping and surface auguring has identified a new linear trend of mineralization located 2km northwest of the known airborne anomalies. One composite sample assayed 0.20% U and 0.05% V. A new claim (cateo) has been staked in this area. Geologic investigations suggest the presence of two types of mineralization in stacked paleo-channels with the uranium possibly originating from rhyolitic volcanics of the Upper Jurassic Marifel Formation that surrounds the Santa Barbara depositional basin.

The Rio Negro province mining authority has now granted legal title to four of Blue Sky's cateos in the Santa Barbara project area. The company is preparing applications for Mineral Exploration permits to permit evaluation of the contained mineralization through drilling and surface trenching.

Collection of water samples from wells, seeps and springs is planned to further the company's exploration program and to establish baseline groundwater quality for environmental permitting purposes.

Discussion of Exploration Activities

Radon Soil Gas Survey: A radon soil gas survey was conducted over the three radiometric anomalies (Figure 1). Radon (Rn222) is a decay product of naturally occurring uranium and can be used to identify uranium mineralization that might not be detectable in an airborne survey. It is also highly useful in identifying structures (faults) that may be responsible for localizing uranium mineralization. Radon gas concentrations were determined at 1,672 stations along 400m-spaced survey lines over a total area of 3,200 hectares of the Santa Barbara property. Electret ion chamber radon detectors provided integrated measurements of radon concentrations over 3-day periods at a depth of 40-50 cm in poorly consolidated clastic sediments. Duplicate radon and gamma (collocated) detectors were used to measure the precision of the measurements and to determine whether ionizing radiation from other decaying elements (e.g. K40) might be contributing to the computed radon concentrations.

High Rn222 concentrations closely correlate with the limits of the three airborne anomalies (Figure 2). Values as high as 8,900 pCi/l [330 Bq/l] were measured and 245 (or 15%) of the stations had values exceeding 2,000 pCi/l. Radon survey data generally correspond well to those of the airborne survey. The linear trends of the uranium mineralization may reflect the orientation of regional faults. Some southern, lateral offset of zones of high Rn222 values of 500-1,000m is apparent in the northern and southern anomalies. The cause(s) of these offsets is unclear, but groundwater transport displacement or structural channelling may be possible causes. The data also appear to define a fourth, linear, northeast-trending zone of anomalous Rn222 concentrations between the northern and central anomalies. This new zone does not display a strong radiometric footprint - either in the airborne or ground spectrometer surveys.

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Figure 1: Outlines of the three zones of anomalous uranium mineralization based on the airborne radiometric survey. Radon survey lines (400m spacing) and sample points are illustrated on the N-S dotted lines.

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Figure 2: Results of the radon soil gas survey of the Sta. Barbara project area.

Spectrometer Survey: The Sta. Barbara project area was subjected to a ground radiometric survey with an RS-125 spectrometer along the radon survey lines. Total count gamma radiation ranged from <10cps, 50-200 cps and 5,000-15,000 cps. There is good alignment of the zones of anomalous uranium mineralization between the airborne and surface surveys.

Auger Sampling: A new zone of near-surface uranium mineralization was discovered to the northwest of the three identified airborne anomalies. Samples of yellow carnotite-bearing mineralization were analyzed and found to contain 2,010 ppm U and 504 ppm V. Additional step-out augured holes with a depth of 7m identified further mineralization with a thickness of as much as 2m. Further sampling of this zone on a regular 500m-speaced grid is underway. There is a near-linear relation between uranium and vanadium concentrations.

Auguring of a zone in the middle airborne anomaly has also revealed near surface mineralization with one analysis running at 1,826 ppm U and 462 ppm V.

Figure 3 presents the available analytical data for rock and sediment samples collected over the Sta. Barbara project area.

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Figure 3: Plot of uranium chemical analyses (in ppm U) for rock and sediment samples collected throughout the Sta. Barbara property.

Regulatory Developments: The Rio Negro Province mining authority has granted Blue Sky legal title to four (of eleven) cateos (mining claims) in the Sta. Barbara project area. Environmental impact studies have been completed and landowner permissions acquired for the remaining claims and conveyance of legal titles to Blue Sky are expected in the near term. Application for a new 10,000ha cateo in the area hosting the new mineralization was approved by the Rio Negro mining authorities.

Geological Interpretations: Detailed geological mapping suggests that stacked sequences of paleochannels are present and host two types of near-surface uranium mineralization: younger and thicker mineralization containing significant manganese and organic detritus in arkosic sediments, and underlying mineralization concentrated in higher-energy fluvial deposits. Evidence for a redox-type geological model is clear and supports the hypothesis that uranium was leached from the Upper Jurassic rhyolitic volcanic of the Marifel Formation that surround the Sta. Barbara depositional basin.

The contents of this news release have been reviewed by Dr. Ron McMillan, P.Geo., a consultant to and director of the Company, and a Qualified Person as defined by National Instrument 43-101.

Due to the large land package Blue Sky holds in Argentina and the positive results received to date, the Company will focus its efforts exclusively in Argentina. To reflect this focused approach in Argentina Blue Sky will not proceed with its option to earn a 60% interest in the Karin and Eagle Lake projects in Saskatchewan and it will also not proceed with its option to earn a 100% interest in the Santander and Norte de Santander projects in Colombia.

Blue Sky is a uranium exploration company led by experienced management and technical teams with over 15 years experience in exploring South America. Blue Sky is actively exploring its 500,000 hectare land package in the Patagonia region of Argentina and is constantly reviewing new acquisitions in the region.


"Sean Hurd"
Mr. Sean Hurd, President & C.E.O.

For further information please contact Blue Sky at 1-800-901-0058 or 604-687-1828 extension 690, or fax 604-687-1858, or by email, or visit the Company's web site at

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release. Cautionary Note to US Investors: This news release may contain information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not of mineral deposits on our properties. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

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