Dark Star Minerals (CSE:BATT) has signed a non-binding letter of intent to acquire 100% of Critical One’s (CSE:CRTL) Cobra North and Khan West projects, both located in the Erongo uranium province in Namibia.
The company will pay Critical One (formerly known as Madison Metals) a total of US$760,000 ($1.16 million), as well as issue 14.2 million shares at a price of $0.10 per share.
Dark Star will grant Critical One a 2% overriding royalty for each of the projects, payable following the start of production. Dark Star has the option of buying back 0.5% each of the royalties for a further US$1.5 million in cash.
On the first and second anniversary of the execution date, Dark Star will issue another $1.75 million worth of shares dependent on the timely trading price.
On or before four months from the execution date, the company will expand its board of directors to accommodate Critical One’s CEO and executive Chairman, Duane Parnham.
Either one year from the closing date or following the company’s raise of $10 million, Dark Star will grant Critical One the right to participate in up to 30% of any financing the company undertakes.
At the Cobra North Project, the company will target 11 prospective areas first identified in previous drilling with further exploration.
A historical reverse circulation drilling program saw two of the targets indicating uranium mineralisation, across 3,720m from 50 drillholes.
SRK Consulting reported a JORC-compliant resource estimate of 15.6 million tonnes at 260 parts per million uranium oxide with a contained metal total of 9 million pounds uranium oxide in November 2015.
Over at the Khan West Project, previous exploration work conducted by Critical One saw leucogranite mapping, sampling, and handheld scintillometer and spectrometer readings of seven surface rock-saw trenches.
Results showed a high of 8.47% uranium oxide in chemical assaying, with an average of 1.33% uranium oxide and a scintillometer reading of 15,000 counts per second with an average of 9,600 counts per second.
Dark Star, which has a market capitalisation of C$4.18 million ($4.71 million), believes that by acquiring these projects, it will gain geological potential and strategic advantage from the nearby Rössing Uranium Mine.
Dark Star Minerals is a critical minerals explorer, focusing on the development of its uranium projects across Canada to meet the global demand for sustainable energy.
Write to Maddison Elliott at Mining.com.au
Images: Dark Star Minerals
