F3 Uranium (TSXV: FUU) has optioned out its Murphy Lake project in the Athabasca Basin of Saskatchewan under a newly signed letter of intent. The arrangement will see the project moved into a newly incorporated subsidiary, F4 Uranium, which is intended as a spin-out of F3 for its prospective uranium projects as announced in January.
The option arrangement will see Canadian GoldCamps earn up to a 70% interest in the Murphy Lake project, which is located in the north eastern portion of the Athabasca Basin. GoldCamps is set to sole-fund exploration for a period of three years, while F4 is expected to be the operator during the earn-in period.
Under the terms of the agreement, GoldCamps is set to pay up to $1.4 million in cash for the project, of which $600,000 is payable in the first year, while spending up to $18 million on the project in work expenditures and providing F4 with 9.9% of its outstanding shares on a post-financing basis.
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It’s also noteworthy that those expenditures are expected to come hard and fast. To earn an initial 50% in the Murphy Lake property, GoldCamps is required to spend $5.0 million in each of the first two years of the agreement. To take ownership to 70%, it must spend $8 million in work expenditures in the third year.
“With this transaction, we have immediately demonstrated the successful unlocking of value within F4’s portfolio of fourteen Athabasca Basin projects. The partnership highlights the prospectivity of the Murphy Lake property with Canadian GoldCamps sole-funding exploration for three years, minimizing share dilution to F4 shareholders. [..] This transaction exemplifies F4’s approach of maximizing our opportunities through the use property options, joint ventures and directly funded exploration,” commented Dev Randhawa, CEO of F3 and Executive Chairman of F4, on the agreement.
F3 Uranium last traded at $0.46 on the TSX Venture.
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