Valor divesting Peruvian copper to focus on Athabasca uranium

Valor has agreed to sell the majority of its Picha and Charaque copper projects in Peru to Firetail Resources in order to focus on its high potential uranium assets in Canada’s Athabasca Basin.

Under the agreement, fellow Australian Firetail has paid the company a $200,000 exclusivity fee for a 90-day due diligence period.

Should Firetail proceed with the acquisition, it will pay Valor Resources (ASX:VAL) $550,000 in cash, 15 million FTL shares – representing a 20.58% shareholding in Firetail – and 20 million performance rights subject to certain vesting conditions in return for a 80% interest in Picha and Charaque.

The transaction will allow the company to focus on its highly prospective, drill-ready uranium projects as prices of the energy metal rises amidst increasingly positive sentiment in the sector while retaining exposure to any future exploration upside in Peru through a retained 20% project interest as well as its stake in Firetail.

It follows on the company reaching an agreement in late June to grant Barrick Gold a five-year option to acquire a 70% interest in Charaque for cash payments totalling US$800,000 and US$3m of exploration expenditure.

Executive chairman George Bauk, who will be appointed to Firetail’s board as a director, noted that while the company had previously been distinguished by having high potential mineral assets in Canada’s Athabasca Basin and southern Peru, the proposed deal delivered a necessary portfolio simplification that will unlock significant value for shareholders.

“Having identified significant potential across both the Picha and Charaque Copper Projects over the past few years, we believe that the best way to move these assets forward is via the divestments to Barrick and Firetail,” he added.

“This will allow us to focus on our high-potential Canadian uranium portfolio while retaining exposure to the upside in Peru via a free-carried interest in these assets.

“Uranium 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 recent increases in the uranium spot price are indicative of the excitement that is rapidly building in the uranium sector globally.”

Uranium focus

Valor holds four strategic projects within the Athabasca Basin, the world’s highest-grade source of uranium with an average grade of about 2% U3O8 – about 10 to 20 times higher than the global average.

Despite this, the area has only seen sporadic modern exploration – a shortcoming that the company intends to address on its acreage, where it has already established a number of drill ready targets that will be tested in 2023/24.

Initial work will be carried out at Hidden Bay where priority targets with potential for both basement hosted and Athabasca hosted uranium deposits have been identified.

It has also expanded its land package at Surprise Creek and combed through the historical drilling data with six surface samples returning above 1% uranium with associated copper while four targets have been identified at Cluff Lake following a comprehensive review of all available exploration data.

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.