Sassy Resources (CSE:SASY, OTCQB:SSYRF) announced that it signed a binding letter of intent (LOI) to acquire up to 100% of the Highrock Uranium Project in Saskatchewan’s Athabasca Basin from Forum Energy Metals Corp (TSX-V:FMC, OTCQB:FDCFF).
The company said the drill-ready Highrock project is a potential high-impact exploration play that gives its shareholders exposure to a dynamic sector benefiting from the global energy transition, which is driving significant new investment in nuclear demand.
“This strategic initial foray into uranium makes Sassy the only junior resource company with exploration assets covering Northwest BC’s Eskay Camp (home of our flagship Foremore Project), Saskatchewan’s Athabasca Basin, and the Central Newfoundland Gold Belt - three world-class investor-friendly mining districts that provide a rock-solid foundation for Sassy’s immediate and longer-term success,” president and CEO Mark Scott said in a statement.
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Sassy noted that uranium company Cameco’s former producing Key Lake mine, which extracted over 200 million pounds of uranium by open-pit methods at an average grade of 2.3% U3O8 from 1983 to 1997, is located immediately to the north of the Highrock claim boundary.
Highrock highlights:
- Highrock is situated just outside the Athabasca Basin along the same conductive lithological unit that hosts the Key Lake deposits. The property consists of two claims covering 20 square kilometres (km);
- The exploration target at Highrock is a basement-hosted deposit similar in style to NexGen Energy’s Arrow deposit and Fission Uranium’s Triple R deposit;
- Gravity surveys at Highrock have identified numerous gravity lows, some associated with zones of alteration, along a strong multi-km-long EM defined graphite conductor;
- Initial drilling by Forum in 2015-2016 defined zones of chloritization, bleaching, elevated boron and other pathfinder elements (some associated with the gravity lows), which require follow-up drilling;
- Cameco Corporation (TSX:CCO) adjoins Highrock to the east, the upper northwest and along strike to the south. Fission 3.0 has property immediately southeast of Highrock;
- A 10 to 12-hole drill program totaling approximately 3,000 meters is proposed to test the Highrock target areas in Q1 2022. Permitting, community engagement and procurement processes are underway.
Under the terms of the deal, Sassy paid Forum $50,000 in cash upon signing of the LOI. It will also pay a further $50,000, issue Forum with 250,000 Sassy shares and complete $1 million in exploration expenditures during 2022 for a 20% interest in Highrock.
Sassy can earn an additional 31% interest by paying a further $50,000 and 250,000 shares by early January 2023 and providing $1 million in exploration funding for 2023.
An additional 19% interest may be acquired by Sassy by paying $50,000 and 250,000 shares in early January 2024 and providing an extra $1.5 million in exploration funding.
The final 30% interest in Highrock may be acquired by Sassy by paying $150,000 in cash and 3 million shares before the end of December 2025.
In total, to acquire 100% of Highrock, Sassy said it will pay $350,000 in cash, issue 3.75 million shares and provide up to $3.5 million in exploration funding over four years between January 3, 2022, and December 31, 2025.
Should the project advance to this stage, Sassy said it will pay Forum $1 million on delivery of a feasibility study and a further $3 million on commencement of commercial production.
Forum will maintain a 1% net smelter return (NSR) royalty on Highrock, half of which can be purchased by Sassy before the commencement of commercial production for $1 million.
A 1% NSR on the north claim is shared by third parties, half of which may be purchased by Sassy for the sum of $1 million. A 2% NSR on the south claim is held by a third party and at present is not subject to a repurchase clause, the company added.
Sassy said Forum will act as project operator for 2022 and 2023 - and also in 2024 at Sassy’s option.
It said permitting and procurement processes are well underway to facilitate 2022 drilling starting as early as February and the parties have agreed to complete a definitive option agreement by January 31, 2022.
“Given (vice president for exploration) Ian Fraser’s geological background in Saskatchewan, and in the uranium sector, combined with the bold Sassy approach that has served us well in our first 16 months as a public company, I’m confident we’ll take Highrock to the next level working with a strong technical team at Forum whose work has set the table for a discovery at this property,” Scott concluded.
Contact the author at stephen.gunnion@proactiveinvestors.com