Valor Resources will set a new focus on uranium and rare earths after divesting up to 80 per cent of its Peruvian copper interests to Firetail Resources for an upfront payment of $550,000 and a package of 15 million shares and 20 million performance rights.
The transaction, now approved by Firetail shareholders, will allow Valor to focus on its portfolio of high-grade uranium and rare earths in Canada’s Athabasca Basin, where it holds four strategic projects featuring a series of drill-ready targets.
Under the acquisition agreement, Valor will offload up to 80 per cent of the issued share capital of its fully-owned subsidiary Kiwanda S.A.C. to Firetail. Kiwanda is a Lima-based company and holds the mining concessions that make up Valor’s Picha copper-silver operation and its Charaque copper project in southern Peru.
However, Valor will retain significant exposure to the upside potential of the Peruvian assets through a 20.58 per cent shareholding in Firetail on a fully-diluted basis, in addition to a retained 20 per cent interest in the projects.
The company views its strategic divestment as a win-win as it will maintain an ongoing interest in its prospective copper assets at a time when demand for the multi-purpose metal is set to skyrocket amid a looming shortage. Copper is instrumental in the green-energy revolution.
Firetail will benefit from the deal by inheriting Valor’s experienced in-country Peruvian management and technical team, in addition to the recently-revealed earn-in agreement with leading global gold and copper producer Barrick Gold Corporation at the Charaque project.
The Charaque project covers about 6000 hectares and is awaiting permit approval. Historic mine workings in the area returned respective high-grade silver and lead results going up to 38 grams per tonne silver and 19.5 per cent lead and 43g/t silver and 7.7 per cent lead.
The Picha project had already received drilling approval for up to 120 holes before the deal was done. The project area is about 17km north-east of Buenaventura’s San Gabriel gold-copper-silver deposit that hosts a reported indicated and inferred resource of 132.7 million tonnes at 1.8g/t for 7.6 million ounces gold equivalent.
As nuclear power remains an important part of the global energy mix in the quest to reach net zero by 2050, Valor is looking to mature its uranium prospects in the Athabasca Basin that boasts the world’s highest-grade source of uranium, with an average grade of 2 per cent diuranium pentoxide – more than 10 times the global average.
The company’s Athabasca portfolio, consisting of four projects with three drill-ready targets, is in an area ranked in the top 10 global mining investment jurisdictions in the world. The basin has produced 20 per cent of the world’s primary uranium supply during a 60-year mining history.
Valor recently pegged the 5.76 square kilometre Beatty River heavy rare earths and uranium project that contains assays of up to 8.75 per cent total rare earth oxides (TREO), with up to 1.15 per cent dysprosium oxide from historic trench samples. The company says the dominant rare earths mineral is xenotime, with heavy rare earths consistently comprising more than 90 per cent of the TREO.
It expects to start drilling one of its Athabasca uranium projects, Hidden Bay, in next year’s first quarter. The project is about 20km south-west of the historic Rabbit Lake Mine, which was the longest operating uranium mine in North America. In more than 41 years, the mine produced more than 203 million pounds of uranium concentrates before entering care and maintenance in 2016.
Uranium prices have had a run since mid-March this year, peaking at US$57.75 (AU$89.70) per pound in June. As prices re-test the $57 dollar mark, it may well be a good time for a company to have a uranium resource on the books.
Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au