Blue Sky Uranium (TSXV: BSK) has entered into an arrangement that will see it option out the main deposit at its flagship project, the Amarillo Grande Project.
The arrangement will see Blue Sky option out the Ivana Uranium-Vanadium deposit to Abatare Spain, whom is referred to as COAM. Under the terms of the arrangement, COAM may acquire up to an 80% stake in the deposit in exchange for funding exploration expenditures of US$35 million, as well as funding the development of the project to commercial production.
The agreement is broken down into two stages, with the first stage requiring US$35 million in exploration spend over 36 months to earn a 49.9% interest in the asset. With the delivery of a feasibility study, COAM will be eligible to earn up to an 80% interest in the deposit by developing the project into either small or large scale commercial production, providing the economics are positive. COAM is expected to cover development costs for the project to the tune of up to US$160 million under the current agreement.
A call option has also been put in place that will grant COAM and its funding partner the exclusive right and option to acquire 100% of the undivided interest in all or part of certain exploration targets, subject to annual exploration expenditures and the granting of a 2.0% royalty on such lands.
“Having fleshed out the details of this landmark agreement in recent months, we now look forward to closing the transaction which will position Blue Sky and its shareholders to greatly benefit from advancing the Ivana deposit alongside member companies of the global energy business of Corporación América Group, one of the most capable groups in Argentina,” commented Blue Sky CEO Nikolaos Cacos.
The Ivana deposit presently has a net present value (8% discount) of US$227.7 million based on a preliminary economic assessment that was updated earlier this year.
Blue Sky Uranium last traded at $0.045 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
