Denison Mines (TSX: DML) is offloading certain of its exploration properties in the Athabasca Basin of Saskatchewan. The firm this morning indicated it has optioned out three properties to Cosa Resources (TSXV: COSA) under an arrangement that will see joint ventures formed for the claims.
Properties to be optioned out include Murphy Lake North, Darby, and Packrat, all of which Cosa will acquire a 70% interest in. Cosa is to become the operator of each of the three projects, with Denison retaining a 30% interest in each.
“All three projects offer tremendous upside potential for our shareholders. Most notably, Murphy Lake North is within four kilometres of and on trend with IsoEnergy’s Hurricane Deposit – discovered in 2018 by Cosa’s management team and currently the highest grade Indicated Mineral Resource for uranium on the planet at a staggering average grade of 34.5% U3O8. Cosa views this strategic collaboration with Denison as mutually beneficial, allowing Cosa to increase discovery potential while offering Denison exposure to Cosa’s exploration success,” commented Keith Bodnarchuk, CEO of Cosa.
Consideration for the properties is to amount to $14.2 million in Cosa common shares, $2.25 million in deferred equity consideration, and exploration commitments of $6.5 million across the Darby and Murphy Lake North properties.
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Exploration commitments will see Cosa be required to spend $1.5 million at Murphy Lake North by December 31, 2027, otherwise Denison’s ownership will increase to 51%, while $5.0 million in exploration must be spent at Darby by June 30, 2029.
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Net smelter return royalties are also in play, with 2% royalties assigned to the Darby and Packrat projects, and a 0.5% royalty assigned to Murphy Lake North. The Darby project is also subject to a buydown right, which allows Denison to reclaim up to a 60% interest under certain circumstances.
Upon closing, the transaction will result in Denison holding a 19.95% interest in Cosa Resources, becoming their largest shareholder. Denison will also have the right to appoint two directors to Cosa’s board, so long as it maintains a 10% ownership interest in Cosa.
Denison Mines last traded at $3.21 on the TSX.
Information for this briefing was found via the sources 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.
