CanAlaska farms out three Athabasca uranium properties to Terra Uranium
CanAlaska Uranium Ltd. [CVV-TSXV; CVVUF-OTCQB; DH7-FSE] signed a letter of intent for Terra Uranium Pty. Ltd., an Australian private limited corporation, to earn up to an 80% interest in CanAlaska’s 100%-owned Waterbury East and McTavish projects and up to a 20% interest in CanAlaska’s 100%-owned Waterbury South project. These projects total 5,010 hectares in the Eastern Athabasca Basin of northern Saskatchewan.
Terra may earn up to an 80% interest in each of the Waterbury East and McTavish projects by paying CanAlaska A$100,000 cash and issuing 12% worth of common shares at listing on the Australian Securities Exchange by December 31, 2021.
Cumulatively, Terra may earn an additional 20% interest in the projects by paying CanAlaska a further A$400,000 and incuring A$5,000,000 in exploration expenditures within 18 months of ASX approval date. Terra may earn an additional 20% interest by delivering and filing a JORC-compliant resource of at least 30,000,000 pounds U3O8 on any of the Waterbury East or McTavish claims, and granting CanAlaska a 2.25% net smelter returns (NSR) royalty within 36 months of ASX listing date. CanAlaska will be operator of the projects through the 60% option threshold and charge a 20% operator fee to Terra.
After completion of either of the 40% option or 60% option stages of the agreement, and if Terra elects to not enter the final stage, a joint venture will be formed and the parties will co-contribute on a pro-rata basis or dilute on a pre-defined formula. If either party dilutes to a 10% interest, the diluting party will automatically forfeit its interest in the respective project and will be granted a 2.0% NSR royalty on the respective property. An area of mutual interest will be established that extends 2 km from the claim boundaries.
Terra may earn up to a 20% interest in the Waterbury South Project by paying CanAlaska A$250,000 cash, issuing 6% worth of common shares at listing on the ASX (listing due by December 31, 2021), and incurring A$1,500,000 in exploration expenditures within 12 months of ASX listing date. CanAlaska will be operator of the project through the 20% Option and charge a 20% operator fee to Terra.
After completion of the 20% option stage of the agreement, a joint venture will be formed and the parties will co-contribute on a pro-rata basis or dilute on a pre-defined straight-line dilution formula. An area of mutual interest will be established that extends 2 km from the claim boundaries.
Terra Uranium Pty Ltd is an Australian private limited corporation that is in the process of undergoing an initial public offering and concurrent listing on the Australian Securities Exchange (ASX). It is a condition of this transaction that Terra be listed on the ASX.
CanAlaska is currently drilling on its West McArthur Joint Venture Project in the 42 Zone discovery area, a joint venture with Cameco Corp. [CCO-TSX; CCJ-NYSE]. Denison Mines Corp. [DML-TSX; DNN-NYSE American] is currently drilling on CanAlaska new Moon Lake South Joint Venture near Denison’s Wheeler River Project.