• Firetail’s shareholders give the all clear for Peruvian project acquisition
  • Divestment allows Valor to focus on Canadian REE and uranium assets
  • The company retains exploration upside with up to 20% stake in FTL and 20% free carry in the project
  • Uranium to play a key role in global decarbonisation

 

Shareholders of Firetail Resources (ASX:FTL) have approved the acquisition of Valor Resources’ Picha copper-silver project and Charaque copper project in southern Peru.

The transaction will streamline Valor’s (ASX:VAL) global portfolio, allowing it to focus on its high-potential uranium and rare earth assets in Canada’s Athabasca Basin.

Firetail will acquire up to an 80% interest in the projects for $550,000 in cash, 15 million Firetail shares and 20 million performance rights subject to certain vesting conditions.

The equity consideration is equivalent to a 20.58% shareholding in Firetail on a fully-diluted basis, so Valor will retain exposure to any future exploration upside in Peru.

Plus, as part of the transaction, Valor executive chairman George Bauk will be appointed to the Firetail board as a director. Firetail will inherit the company’s recent earn-in agreement with leading global gold and copper producer Barrick Gold Corporation for a five-year option to acquire a 70% interest in the Charaque project for cash payments totalling US$800,000 and US$3m of exploration expenditure.

The transaction is now scheduled for completion shortly, with final drill permitting secured for Picha and a maiden 5,000m diamond drilling program scheduled to commence in October 2023.

 

Uranium sentiment on the upswing

Today’s completed transaction allows Valor to focus on the high-grade uranium and rare earth assets in its portfolio – situated in Canada’s busy Athabasca Basin – at a favourable time in the market for these commodities.

Uranium, in particular, is an essential part of the energy balance moving forward if the world is going to get anywhere near meeting its net-zero ambitions.

The uranium market has experienced strong demand in recent years in response to a growing recognition of its important role in achieving global decarbonisation, with spot prices doubling since mid-2019.

“The divestment will streamline Valor’s portfolio, crystallising value from its Peruvian assets while allowing it to focus on its highly prospective, drill-ready uranium projects in Canada’s Athabasca Basin at a time of rising uranium prices and surging investor interest in the sector,” the company said.

 

Athabasca hosts world’s highest-grade uranium

Valor holds four strategic projects within the Athabasca Basin, which is the world’s highest-grade source of uranium, with an average grade of ~2% U3O8 across the basin.

That’s approximately 10-20 times the global average.

The company’s uranium projects include the Hook Lake uranium project 60km east of the Key Lake Uranium Mine in northern Saskatchewan, the Cluff Lake uranium project 7km east of the former producing Cluff Lake Uranium Mine and the Hidden Bay uranium project 20km south-west of the historic Rabbit Lake mine.

 

Drill ready targets for 2024

Despite being an area of extremely high-grade mineralisation, the Athabasca basin has only been sporadically explored by modern methods.

Valor has several drill ready targets to be tested, with drilling at Hidden Bay planned for Q1 2024. It is also aiming to be on the ground soon to continue exploration activities at the Surprise Creek project.

In addition, Valor recently staked the Beatty River heavy rare earth and uranium project, where trenching and surface sampling by previous explorers flagged assays up to 8.75% TREO with up to 1.15% dysprosium – which is used in rare earths magnets for electric vehicles and wind turbines.

 

 

This article was developed in collaboration with Valor Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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