U3O8 Corp. sells Laguna Salada project to focus on Berlin uranium and battery deposit
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Toronto, Ontario – (Newsfile Corp. – June 11, 2021) – U3O8 Corp. (TSXV: UWE.H) (“U3O8“or the”Company“) announces that International Consolidated Uranium Inc. (” CUR “) has elected to exercise its option to purchase the Laguna Salada project in Argentina from U3O8 Corp. The terms of the option agreement (“Option agreement“) were described in the press release from U3O8 Corp. dated December 14, 2020.
The cash component of the purchase will be used to advance U3O8 Corp’s Berlin field. which contains uranium, a range of battery products and rare earth elements. The component of the purchase price payable in CUR shares will be held in the treasury of U3O8 Corp. in order to provide its shareholders with exposure to an expanded portfolio of uranium deposits that CUR has acquired in Australia and Canada.
Consideration for the Laguna Salada project
A summary of the status and related terms of the option agreement is as follows:
- Upon signing the option agreement on December 14, 2020, CUR paid C $ 50,000 to U3O8 Corp. to maintain in good standing the mining concessions constituting the Laguna Salada project.
- The option agreement required that an option commission of C $ 300,000 be paid on the effective date of the option agreement following receipt of conditional approval from the TSX Venture Exchange. These option fees have two components: C $ 175,000 must be paid in cash and C $ 125,000 in common shares of CUR. Since the 5-day VWAP as of June 9, 2021 is C $ 2.22, CUR will issue 56,306 common shares with a value of C $ 125,000.
- CUR has agreed to pay an additional CA $ 50,000 in cash to keep the Laguna Salada concessions in good standing.
- By choosing to exercise the call option, which CUR has elected to do by notice to U3O8 Corp. dated today, CUR will pay C $ 1.5 million to U3O8 Corp. through the issuance of 675,675 ordinary shares of CUR. These shares will be held in escrow until the mining concessions that make up the Laguna Salada project have been transferred from U3O8 Corp. at CUR.
- U3O8 Corp. has additional upside exposure to the uranium market in that if, within 10 years from the date of the option agreement, the spot price of uranium reaches US $ 50 per pound (” / lb “), CUR would make a payment of C $ 505,000. If the spot price hit US $ 75 / lb, CUR would pay U3O8 Corp. CA $ 758,000 and when it reached US $ 100 / lb, U3O8 Corp. would receive C $ 1,010,000.
The closing of the acquisition remains subject to the satisfaction of certain customary closing conditions for a transaction of this nature. All securities issued under the Option Agreement are subject to final approval by the TSX Venture Exchange. The shares are subject to a legal retention period of 4 months and one day.
The Berlin deposit contains uranium, nickel, vanadium, phosphate and rare earth elements in a 3-meter-thick sedimentary layer whose close resource drilling and further exploration drilling have been extended. shown to be remarkably constant in terms of thickness, metal content and grade. This exploration drilling was carried out on an area similar in size to the resource area – which highlights the growth potential of the resource. The current resource estimate is shown in Table 1. Extensive metallurgical testing of the deposit has extracted this series of raw materials from the host rock.
Next steps for the Berlin depot
As announced in the press release of March 29, 2021, work has started to determine the impact that membrane technology may have on reducing the operating and capital costs of the Berlin deposit, as modeled in the preliminary economic assessment. The results of the first stage of the three phases of test work described in the press release of March 29, 2021 will be announced shortly.
Table 1. Resource estimate for the Berlin deposit estimated in accordance with National Instrument 43-101: (millions of pounds: “Mlbs”, millions of metric tons: “Mt”). The data comes from the preliminary economic assessment of the Berlin deposit, Colombia, 2013.
|Resource Category||Tons (millions)||Uranium||Phosphate||Nickel||Vanadium|
|To note||(Mlb)||To note||(Mountain)||To note||(Mlb)||To note||(Mlb)|
|Resource Category||Tons (millions)||Rare earth elements||Rhenium||Molybdenum|