Standard Uranium Ltd (TSX-V:STND, OTCQB:STTDF) announced that it has signed a letter of intent (LOI) with Collective Metals (CSE: COMT), in which Collective Metals will be granted the option to acquire a 75% interest in the 4,002-hectare Rocas Project in Saskatchewan’s eastern Athabasca Basin region.
The uranium exploration company said to receive its 75% interest, Collective Metals must pay C$225,000 in cash, issue C$725,000 in Collective Metals shares, and incur C$4.5 million worth of exploration expenditures over three years.
"There is no better place on the planet to make these discoveries than the Athabasca Basin region," Standard Uranium CEO Jon Bey said in a statement.
"We look forward to completing this transaction and beginning phase one of our three-year exploration programs run by our Standard Uranium technical team."
Standard Uranium noted that it will act as the operator of the project and will be entitled to charge a 10% fee on expenditures in Year 1, increasing to 12% in Year 2 and Year 3.
It added that following successful completion of the obligations of the option agreement in Year 3, Standard Uranium will retain a 2.5% net smelter returns royalty on the project, of which 1% may be purchased back at any time for a one-time cash payment of C$1 million.
Both companies intend to form an unincorporated joint venture for the further development of the project.
The Rocas project is located 75 kilometers southwest of the Key Lake Mine and Mill facilities.