Skyharbour Resources (TSX-V:SYH) has entered into a definitive repurchase agreement with Denison Mines Corp (TSX:DML) representing a combined total of up to C$61.5 million ($67.5 million).
Denison will acquire an initial project interest in the Russell Lake Uranium Project, located in the Athabasca Basin, which Skyharbour recently agreed to acquire an 100% interest in, as Mining.com.au reported.
Under the strategic agreement, Skyharbour will receive C$21.5 million in cash or shares, plus expenditures totalling up to C$40 million over seven years, for Denison to acquire between 20% and 70% interest in the project claims.
Haywood Securities is acting as financial advisor to Skyharbour, while AFG Law and DuMoulin Black are acting as legal counsel.
Both companies will enter into four separate joint venture agreements at closing on various claims making up Russell Lake.
Skyharbour will retain ownership interests of 80%, 70%, 51% and 30% for the Russell Lake, Getty East, Wheeler North, and the Wheeler River Inlier claims, respectively. Denison can then earn up to a 70% interest in the Wheeler North and Getty East claims through option agreements.
Denison has committed to a minimum of C$4 million in exploration expenditures over the first two years at Wheeler North and Getty East combined, as well as agreeing to fund to maintain its pro-rata 20% stake in the Russell Lake claims through 2029 up until the expenditure reaches C$10 million.
CEO Jordan Trimble says Denison’s success in exploring, permitting, and developing in the neighbouring Wheeler River Project will provide insight and experience as the companies jointly pursue Russell.
“This transaction delivers on our belief that Russell should be treated as multiple different projects due to the abundance of targets and sheer scale of the land package in one of the most prolific uranium exploration corridors in the world,” Trimble says.
“The structure and terms of the strategic agreement allow Skyharbour to continue exploring as operator at the majority of the claims at Russell, while participating in the future success that Denison seeks as operator at the Wheeler North and Wheeler River Inlier claims.”
Denison CEO David Cates adds that this transaction achieves the company’s objective by providing Denison with the opportunity to lead and participate in exploration efforts across four newly created joint ventures.
“We are excited to build on our long-standing relationship with Skyharbour and accelerate the evaluation of this exceptional package of highly prospective ground.”
The Russell Lake Project is a large, advanced-stage uranium exploration property totalling 73,314 hectares.
Write to Aaliyah Rogan at Mining.com.au
Images: Skyharbour Resources
