Red Lake Gold adds uranium project to portfolio

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Red Lake Gold Inc. [RGLD-CSE] said Thursday it has expanded its portfolio by acquiring the Preston District Uranium Project, which is located in the Athabasca Basin in Saskatchewan.

The Athabasca Basin is a region that is best known as the world’s leading source of high-grade uranium, accounting for 20% of the world’s supply.

The Preston District Uranium project is a district-scale exploration property located in the southwestern Athabasca Basin, which hosts a number of high-grade uranium discoveries, including Fission Uranium Corp.’s [FCU-TSX; FCUUF-OTCQX; 2FU-FSE] Triple R uranium deposit, and NexGen Energy Ltd.’s [NXE-TSX, NYSE] Rook 1 property.

Preston consists of the northern and southern project area totalling 11 mining claim licenses covering approximately 56,571 hectares. It is either adjacent to or proximal to a number of other uranium exploration companies, including NexGen Energy, Azincourt Energy Corp. [AAZ-TSXV, AZURF-OTC], Skyharbour Resources Ltd. (SYH-TSXV, SYHBF-OTCQB] and 79 Resources Ltd. [SNR-CSE].

“The Preston District Uranium Project represents a high-impact uranium exploration opportunity which allows Red Lake to cost-effectively build a project base in a world-class uranium region that has attracted significant equity market interest,” said Red Lake Chairman and CEO Ryan Kalt.

The project was acquired in an arm’s length purchase and sale agreement and was executed at a cash payment equal to the license fees paid to the government of Saskatchewan and certain non-material expenses affiliated with the license acquisition process.

A pre-existing 2.0% royalty on the underlying licenses was assumed by the company.

Red Lake is engaged in gold exploration on projects in northwestern Ontario and Quebec. Its assets include the Whirlwind Jack gold project in the Red Lake mining district of Ontario.

Red Lake shares were unchanged at 25 cents on Thursday and trade in a 52-week range of 41 cents and 12.5 cents.

News of the deal comes as the price of uranium has been trending downwards to US$42 a pound, after hitting recent highs of US$47 a pound in early December, 2021. “Over the past two weeks, pricing levels generally trended downward as transactions became more sporadic and potential buyers dropped their bids,” said Scotiabank in an investment report.

The uranium sector has been in the news this week amid reports that the European Commission is planning to allow gas and nuclear to be labelled as “green” investments, Scotiabank said.

Draft proposals seen by the Guardian newspaper would allow gas and nuclear to be included in the EU “taxonomy of environmentally sustainable economic activities,” subject to certain conditions.

The taxonomy is a classification system intended t direct billions to clean-energy projects to meet the EU goal of net zero emissions by 2050. France and other pro-nuclear states, such as Czech Republic and Hungary, support the inclusion of nuclear, while many governments in central, eastern and southern Europe lobbied for gas to be included as a “bridge fuel.”


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