Federal Government approval remains the main hurdle in the way of some of Japan's biggest utilities emerging with a 35 per cent stake in the Lake Maitland uranium project in the Goldfields.

Lake Maitland's owner Mega Uranium and a consortium comprising the JAURD group and Itochu Corp today agreed to final terms governing the $US49 million farm-in deal, following three months of negotiations.

The deal remains subject to Foreign Investment Review Board approval and other regulatory sign-offs.

The JAURD group, or Japan Australia Uranium Resources Development Co, is owned by utilities Kansai Electric Power, Kyushu Electric Power and Shikoku Electric Power and mandated to secure uranium supplies for its shareholders

Their deal will mark the second strategic investment by Japanese groups in WA's fledgling uranium industry, which received a boost last year following the election of pro-uranium mining Premier Colin Barnett.

Mitsubishi Development paid $US495 million, in joint venture with Canada's Cameco Corp, to buy the massive Kintyre project in the Pilbara off Rio Tinto in October.

Lake Maitland, 130km south-east of Wiluna, contains inferred resources of 23.7 million pounds of U3O8 and is one of WA's biggest known uranium deposits. Mega is hopeful of beginning mining in 2011.

The Canadian company has already applied for a mining licence and will use the Japanese cash injection to fund a feasibility study.

A scoping study completed by Mega late last year found it would cost $US85.1 million to develop a mine at Lake Maitland capable of producing 1.65 million pounds of U3O8 a year over a 10-year mine life. At the time Mega told its investors that based on a $US75 a pound U3O8 price, the project would have a net present value of $US181.4 million and generate returns of 43.4 per cent.

Uranium prices have fallen to just under $US60/lb since.

PERTH PETER KLINGER