Valor Resources Ltd (ASX:VAL) entered into a binding term sheet during the December quarter to acquire 100% of the issued capital of Pitchblende Energy Pty Ltd - the holder of interests in two uranium projects in Saskatchewan, Canada.
Hook Lake and Cluff Lake uranium projects are within the prolific uranium district of the Athabasca Basin covering 861 square kilometres.
The Athabasca Basin has an average resource grade of 2% U3O8 and historically has produced around 20% of world’s primary uranium supply.
Valor anticipates settlement of the transaction to occur in early February 2021.
Acquisition backed by experienced board
In conjunction with the transaction, Valor announced the appointment of George Bauk as executive chairman and Gary Billingsley as non-executive director, as well as the resignation of Dr Nicholas Lindsay as executive director – technical.
Bauk said: “The acquisition of the Hook Lake Project and the Cluff Lake Project in the Athabasca Basin provides the company with an exciting opportunity to discover uranium within a world-class uranium district.
“Following the approval from shareholders of the transaction, the company plans to hit the ground running with a well-planned exploration program.
“We have strengthened the team with Gary Billingsley joining the board, a veteran in the mining industry with a geology background who lives in Saskatoon, Saskatchewan.
"This is a significant advantage to Valor as we manage our way through Covid-19 and having someone I have known for 15 years provides the board with additional support whilst we have limited ability to travel overseas.”
Hook Lake Uranium Project
Subject to shareholders approving the issue of 250 million shares to Skyharbour Resources Ltd (CVE:SYH) (OTCMKTS:SYHBF) (FRA:SC1P), Pitchblende will have the right to earn an 80% working interest in the Hook Lake Uranium Project (previously referred to as Falcon Point Uranium Project), 60 kilometres east of the Key Lake Uranium Mine in northern Saskatchewan.
Covering 25,846 hectares, the 16 contiguous mineral claims host several prospective areas of uranium mineralisation:
- Hook Lake/ Zone S – High-grade surface outcrop with reported grades up to 68% U3O8 (grab) with structural lineaments present several prospective regional targets;
- Nob Hill – Fracture-controlled vein-type uranium mineralisation on surface outcrop with up to 0.13%-0.14% U3O8 (grab) with diamond drilling intersecting elevated uranium in several drill holes with values up to 422 parts per million uranium over 0.5 metres;
- West Way - Vein type U mineralisation within a NE-trending shear zone with grab samples taken from the surface showing contained variable uranium values including up to 0.48% U3O8;
- Grid T - Fracture-hosted secondary uranium mineralisation in sheared calc-silicates and marbles in a 100-metre x 20-metre zone of anomalous radioactivity with grab samples having up to 800 parts per million uranium;
- Alexander Lake Boulder Field – 30 biotite-quartz-k-feldspar pegmatite boulders NE of Alexander Lake with best results including 360, 1,400 and 1,600 parts per million uranium;
- Thompson Lake Boulder Field – Numerous radioactive boulders and blocks of pegmatised meta-arkose, pegmatite and granite with the best value obtained of 738 parts per million uranium from a granite boulder; and
- NE Alexander Lake – Several calc-silicate, plagioclase-quartz granulite, quartzite, and meta-arkose boulders with up to 4,800 parts per million uranium, 7,600 parts per million molybdenum, and 1,220 parts per million nickel.
Initial exploration planned
Compilation and reinterpretation of previous exploration work results is already underway.
It is anticipated that the initial phase of exploration work by Valor will include further bio-geochemical surveys, detailed UAV magnetics, ground gravity and resistivity surveys as well as detailed geological and structural mapping.
Based on this work drill targets will be selected.
Pitchblende’s right to earn its 80% interest in the Hook Lake Project is conditional on Valor spending up to $400,000 over the next 6-9 months to undertake a preliminary assessment of the project.
If Valor decides to proceed with the Hook Lake Project, it will be required to commit up to $3.1 million in exploration expenditure to secure its 80% interest.
In the event that it decides not to proceed, VAL will cancel up to 150 million of the shares to be issued to Skyharbour.
The Hook Lake and Cluff Lake uranium projects.
Cluff Lake Uranium Project
Pitchblende owns a 100% equity interest in 18 contiguous mineral claims covering 60,296 hectares in northern Saskatchewan.
Much of the project area is located within the Carswell geological complex that hosts the Cluff Lake Mine which produced 64 million pounds of U3O8 during its 22-year mine life at an average grade of 0.92% U3O8 from several open pit and underground operations.
The southern boundary of the property is within 5 kilometres of the recently discovered Shea Creek Deposit operated by Orano Canada Inc, which hosts an indicated resource of 68 million pounds of U3O8 at a grade of 1.48% U3O8.
Previous exploration work in the project area has identified several mineralised boulder trains and outcrops as well as prospective structural targets identified through airborne geophysics.
An airborne MEGATEM survey carried out in 2007 resulted in the identification of eight regions of interest along the eastern edge of the Carswell structure that merit follow-up exploration work.
As with the Hook Lake project, initial data compilation and evaluation is underway, the results of which will dictate the design of the initial work program.
Peruvian projects update
During the December quarter, the company completed documentation to transfer the entities which hold rights to the Berenguela Project in Peru back to SSR Mining Inc (NASDAQ:SSRM) (TSE:SSRM) (FRA:ZSV) on terms where the consideration for the transfer is the release and discharge of Valor's acquisition obligations including the release of outstanding amounts of US$10.8 million owed to SSR and relevant security interests.
Settlement of the transfer has now been completed and Valor has no further interests in the Berenguela Project.
Valor’s continues to hold the rights to the Picha and Berenguela South Projects in the Moquegua Department of Peru through its 100%-owned Peruvian subsidiary, Kiwanda SAC.
The company intends to continue its focus on developing the exploration potential of the Berenguela South and Picha projects when circumstances allow.