CanAlaska farms out Saskatchewan uranium projects

Canalaska Uranium Ltd. [CVV-TSXV; CVVUF-OTCQB; DH7N-FSE] has entered into a letter of intent (LOI) with Basin Energy Ltd., an Australian unlisted public company, to allow Basin Energy to earn up to an 80% interest in CanAlaska’s 100%-owned North Millennium and Geikie projects, and a 100% interest in CanAlaska’s 100%-owned Marshall project. These projects total 50,994.56 hectares in the eastern Athabasca basin in Saskatchewan, Canada.

Basin Energy may earn up to an 80% interest in each of the North Millennium and Geikie projects by undertaking work and milestone payments in three defined earn-in stages on each project. Basin Energy may earn an initial 40% interest in each of the projects by paying the company AUD$41,666.66 cash per project and issuing 6.66% worth of ordinary shares in Basin Energy’s capital structure as at listing on the Australian Securities Exchange per project within 180 days following execution of a definitive property option agreement (POA). Basin Energy will have the right to extend the 40% option on a month-by-month basis for up to three consecutive months upon payment of an option extension fee of AUD$8,333 per month per project.

Basin Energy may earn an additional 20% interest (60% option) in each of the projects by incurring AUD$2.5-million in exploration expenditures per project within 24 months of the ASX listing date. Basin Energy may earn an additional 20% interest (80% option) in each of the projects by issuing a further 2.25 million ordinary shares in Basin Energy per project and incurring an additional AUD$5-million (total: AUD$7.5-million) in exploration expenditures per project within 48 months of the ASX listing date and granting the company a 2.75% net smelter returns (NSR) royalty on all products derived from the claims with a repurchase right of 0.5% NSR for AUD$500,000 at any time commencing from the grant of the 2.75% NSR per project.

CanAlaska will be operator of the projects through the 60% option threshold and charge an operator fe. Basin Energy will be obligated to keep and maintain the North Millennium and Geikie claims in good standing for a minimum period of one year at all times during the term of the POA. A joint technical operating committee (JTOC) will be established. Basin Energy will have the deciding vote on all expenditures to be incurred on the claims during the term of the POA.

After successful completion of either of the 40% option or 60% option stages of the agreement, and if Basin Energy elects to not enter the final stage, a joint venture will be formed.

Basin Energy may acquire a 100% interest in the Marshall project by paying CanAlaska AUD$41,666.66 cash and issuing 6.66% worth of Basin ordinary shares as at listing on the ASX within 180 days following execution of a definitive POA. Basin Energy can extend the payment period on a month-by-month basis for up to three consecutive months upon payment of an option extension fee of $8,333 (Australian) per month.

CanAlaska will have a 2.75% NSR on all products derived from the claims with a repurchase right of 0.50% NSR for AUD$500,000 at any time commencing from the grant of the 2.75% NSR.

Basin Energy will engage CanAlaska to be operator of the initial $1.5-million (Australian) work program on the property after closing of the transaction. CanAlaska will be entitled to charge Basin Energy an operator fee.

CanAlaska is drilling on its Waterbury South project near the Cigar Lake mine.