Standard Uranium Ltd (TSX-V:STND, OTCQB:STTDF) told investors it has granted Allora Resources, an arm’s-length private company, the option to acquire up to 100% of its 7,302-hectare Canary project.
The company said the deal highlights the strong interest in its portfolio of projects in Saskatchewa's Athabasca Basin.
Under a non-binding term sheet signed on October 30, 2023, Standard Uranium noted that the option is exercisable in three stages and is contingent on Allora going public on the Australian Securities Exchange.
During the first stage, Allora can earn a 51% stake in the Canary project by completing cash payments totaling $200,000, arranging for the issuance of $200,000 worth of shares to Standard Uranium, and incurring $3 million of expenditures, all within the first two years of the option.
During the second stage, Allora can take its interest to 75% by paying a further $100,000, issuing a further $100,000 worth of shares to Standard Uranium and incurring an additional $3 million of expenditures within the third year of the option.
Following completion of the second stage, Allora can acquire the remaining interest in the project by completing a bankable feasibility study and making a payment to Standard Uranium equivalent to the value of the remaining interest as determined by an independent third party.
If Allora acquires less than a 100% interest in the Canary project, Standard Uranium said the two companies plan to form a joint venture to further develop the project. It will act as the operator of the project during the first two stages of the Option and will be entitled to charge a 10% operator fee on expenditures. Following the exercise of the option, it will retain a 1.5% net smelter returns royalty on the project, of which 0.5% can be purchased back for $500,000.
"Quickly reaching terms on our Canary project demonstrates the continued strong interest in our portfolio of projects fitting into our project generator model,” Standard Uranium chairman and CEO Jon Bey commented.
“We are currently in advanced discussions on six of our seven projects and have the goal of completing up to five project deals in 2024, which could total more than $ 40 million and commit $ 10 million towards exploration programs next year.”
Standard Uranium is a uranium exploration company and emerging project generator poised for discovery in the world's richest uranium district. The company holds interest in over 75,895 hectares in the world-class Athabasca Basin in Saskatchewan, Canada.
Contact the author at stephen.gunnion@proactiveinvestors.com