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Skyharbour acquires 2 uranium projects on east side of Athabasca basin from Denison

Published: 20:10 30 May 2014 BST

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Skyharbour Resources (CVE:SYH) jumped on Friday after the company signed a deal to acquire Denison Mines' (TSE:DML) 90,892-hectare Way Lake uranium project and the 12,660-hectare Yurchison Lake project, both located on the eastern flank of the Athabasca Basin in Saskatchewan. 

Under the terms of the deal, Skyharbour will pay $20,000 in cash and issue 2 million shares to Denison for a 100% interest in both properties. Denison will retain a 2% net smelter return royalty in the projects, of which 1% may be purchased by Skyharbour for $1 million.

The Way Lake project currently hosts an NI 43-101 compliant inferred mineral resource of 6.96 million pounds of uranium at Fraser Lakes zone B. Skyharbour said the exploration potential of the 6km by 7km Fraser Lakes target area is consideration "exceptional", including resource expansion potential along strike and at depth at the zone B deposit.

To date, drilling at Way Lake has totaled over 20,000 metres, with over $10 million in previous exploration across six, near-surface target areas on the large property.

At the Yurchison Lake project, prospecting near old trenches returned significant uranium (0.09% to 0.30% U3O8) and molybdenum (2,500 ppm to 6,400 ppm) mineralization in outcrop and float samples, according to the company's statement.

"The acquisition of 100% interests in the sizeable Way Lake and Yurchison Lake Projects is a milestone for the company as it significantly enhances Skyharbour's portfolio of Athabasca uranium projects," said president and CEO Jordan Trimble. 

"The current uranium market has presented excellent opportunities for Skyharbour to increase its ownership, at attractive valuations, in high-quality uranium projects in the Basin with the objective of optimizing discovery potential and capitalizing on a future uranium market turnaround."

The chief executive further said that the deal is believed to be highly accretive, as the company looks to add resources and bolster its exposure to the east side of the Athabasca Basin.

The uranium explorer, which is also a member of the three-strong Western Athabasca Syndicate that controls a large, geologically prospective land package consisting of five properties in the Athabasca Basin, also owns a 60% stake in the Mann Lake property, located 25 km southwest of Cameco's McArthur River mine.

Shares rose 5.9% to 9 cents on the TSX Venture Exchange Friday.

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