Standard Uranium options Athabasca project to Atco

Standard Uranium Ltd. [STND-TSXV, STTDF-OTCQB, 9SU-FWB] said it has signed a definitive agreement that gives Atco Mining Inc. [ATCM-CSE] the option to earn a 75% stake in the company’s Atlantic uranium project in Saskatchewan.

The agreement requires Atco to spend $6.3 million on exploration within three years at the 3,061-hectare Atlantic property, which is located due west of IsoEnergy’ Ltd.’s [ISO-TSXV, ISENF-OTCQX] Hurricane Zone in the eastern Athabasca Basin.

Standard has said the Atlantic project has exceptional potential for a high-grade unconformity-related uranium discovery, and it is planning to launch a drilling program in the “immediate future.’’

Following the exercise of the option, the parties intend to form a joint venture for the further development of the project. Prior to that, Standard will act as project operator and will be entitled to charge a 10% fee on expenditures in year one, increasing to 12% years two and three.

Standard Uranium can also pick up $430,000 in cash payments and 15 million Atco shares.

Once the option is exercised, Standard will retain a 2.5% net smelter return royalty on the project, of which 1.0% may be repurchased for a one-time cash payment of $1.0 million.

Atco shares were active on the news, easing 10.5% or $0.01 to $0.085. The shares trade in a 52-week range of 23 cents and $0.04. Standard Uranium was unchanged at $0.07 and trades in a 52-week range of $0.09 and $0.020.

The Atlantic project is situated in the Mudjatik geological domain where several recent discoveries have been made, including IsoEnergy’s Hurricane Zone. Standard said it completed a high-resolution ground gravity survey on the project in 2022, revealing multiple subsurface density anomalies, potentially representing significant hydrothermal alteration zones in the sandstone and proximal to basement conductors.

The Atlantic property is located due west of IsoEnergy’ Ltd.’s [ISO-TSXV, ISENF-OTCQX] Hurricane Zone. Historical drilling by Cameco Corp. [CCO-TSX, CCJ-NYSE] in 1992 (Hole Be-04) encountered up to 0.06% U308 over 0.5 metres in sandstone, proximal to the unconformity. Follow-up drilling by Denison Mines Corp. [DML-TSX] in 2012 next to BE-04 encountered a metal-enriched fault-zone in the sandstone located 130 metres above the basement rock that contains 10.2 ppm uranium, 786 ppm lead, and 2,270 ppm zinc over 0.1 metre.

Standard Uranium has interests in 84,930 hectares in the Athabasca Basin of Saskatchewan, a region that ranks among the world’s leading uranium districts for exploration and mining.

Thanks to its project generator business model, the company has over $30 million committed to exploration programs over the next three years, including $9 million this year. That money is earmarked for projects that Standard owns outright or has optioned off to other partners.