Blue Sky Uranium Options Out Main Deposit At Flagship Asset For US$35 Million In Project Spend
Blue Sky Uranium (TSXV: BSK) has entered into an arrangement to option out what amounts to the core portion of its flagship property. The arrangement, entered into with Corredor Americano, a subsidiary of Corporacion America Group, will see the Ivana uranium-deposit at the firms Amarillo Grande project optioned out.
The arrangement will see Corredor earn up to a 50% interest in the project by advancing the property to the completion of a feasibility study, drilling key exploration targets, and spending up to US$35.0 million in exploration. Upon the decision to fund the capital cost of the project, Corredor will earn a further 1% in the project, followed by a further 29% interest upon completion of fully funding the capital costs of the project to enable production.
The transaction is currently defined as being at the binding term sheet stage, with the two parties expected to advance the arrangement to a definitive agreement within the next 90 days.
As part of the deal, Corredor will also obtain a call option to conduct exploration and drilling on certain prospective areas and exploration targets, and a five year option to acquire the exploration targets.
“The proposed transaction with COAM provides compelling benefits for Blue Sky and its shareholders by setting a clear path to bring Ivana to production in partnership with one of the most capable groups in Argentina. Following an initial 50% interest for bringing Ivana to feasibility phase, Blue Sky will receive a free carry on the estimated capital costs in exchange for COAM earning an additional 30% interest in the Project. Furthermore, we are benefiting from substantial investment towards exploration at adjacent Properties, with the potential for new discoveries to be purchased by the JVCO in the future,” commented Nikolaos Cacos, CEO of Blue Sky.
The Ivano deposit makes up the majority of the value within the Amarillo Grande project, Blue Sky’s flagship asset. The deposit contains a mineralized corridor 5 kilometres in length, which has widths between 200 to 500 metres. The deposit has a resource estimate of 19.7 million tonnes containing 17.0 million pounds of 0.039% U3O8 and 8.1 million pounds of 105 ppm vanadium.
A preliminary economic assessment completed earlier this year outlined a base net present value (8%) for the project of $227.7 million at $75 per pound uranium, with an IRR of 38.9% and a payback period of 1.9 years. The estimate is based on average annual production of 1.5 million pounds of uranium over an 11 year mine life.
Blue Sky Uranium last traded at $0.065 on the TSX Venture.
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