Terra eyes ‘game-changing’ uranium acquisition in Canada

Terra Uranium (ASX:T92) has signed a binding letter of intent (LOI) to acquire 100% of the 15.3-million-pound Amer Lake Uranium Project in Nunavut, Canada. 

Located in the Baker Lake region north of Amaruq, the Amer Lake Project consists of 6 claims totalling 1,190 hectares, plus another 2 claims totalling 1,526 hectares that have been staked by Terra.

According to today’s announcement, the project hosts a non-JORC-compliant — but Canadian NI 43-101-compliant — resource measuring more than 17.82 million tonnes at 380 parts per million (ppm) triuranium octoxide (U3O8), representing 15.3 million pounds of contained U3O8 based on a cut-off grade of 100ppm.

Terra, which has a $10.01 million market capitalisation, says it will move forward with a review of historical geological data in order to publish a revised, JORC-compliant MRE in the near future, along with verification drilling of parts of the Main Zone deposit.

“Terra’s Canadian team identified an excellent and extremely value-accretive opportunity to acquire 6 claims at Amer Lake in the Canadian territory of Nunavut,” Executive Chairman Andrew Vigar says.

“This is a truly game-changing acquisition for Terra, as it transforms us into a company with real ‘pounds in the ground’.

“We look forward to upgrading the Amer Lake resource to JORC status and updating investors in the near future on the company strategy for this transformative deal and whilst maintaining a focus on our core Athabasca projects.”

Terms of the acquisition include Terra making a C$10,000 payment to the vendor, Andrew Donnelly, within 5 business days of signing the LOI, plus another cash payment of C$120,000 upon closing of the acquisition. 

Donnelly will also be issued shares in Terra worth C$200,000 on closing. The shares will be calculated based on the 5-day volume-weighted average share price. 

Upon definition of a JORC 2012 MRE with a minimum inferred resource of 15Mlbs at 380ppm within 12 months of closing the acquisition, Terra will make another C$200,000 payment on the 12 month anniversary date. 

Payment will be satisfied by a minimum of 50% cash, with the remainder to consist of a combination of cash and scrip. 

A further C$200,000 will be paid to Donnelly 18 months from the date of closing, or should Terra deliver a minimum 25% increase to the JORC resource, whichever occurs first.

Terra will also be expected to pay a final C$300,000 payment upon 30 months from closing, or if the company enters a crown mining licence with the Territory of Nunavut. 

Completion of the acquisition is subject to a number of conditions, including both parties entering into a definitive agreement, Terra completing financial, legal and technical due diligence, and both parties receiving all consents and approvals. 

Any uranium production from the 6 claims which make up Amer Lake will be subject to a 1.5% net smelter return royalty.   

Amer Lake sits about 20km north of the operational Amaruq Gold Project, which hosts ‘extensive’ infrastructure, including trafficable roads facilitating access to the local town of Baker Lake. 

Other prospects situated along strike from the Main Zone at Amer Lake with similar uranium mineralisation exposed at surface include Main East, Faucon, Split, and Horned Lake, and are all expected to extend the current resource estimate. 

Terra’s core projects include the HawkRock, Parker Lake, and Pasfield Lake projects, which, along with the Rapid River and Yurkowski projects, sit in the Cable Bay Shear Zone.

Terra Uranium is a mineral explorer positioned in the Athabasca Basin in Canada — a premium uranium province hosting the world’s largest and highest-grade uranium deposits. 

Write to Adam Drought at Mining.com.au 

Images: Britannica
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.