The Usam Project consists of eight claims totalling 42,186 ha and is located approximately 16 km northeast of Cameco’s Eagle Point Mine (Rabbit Lake Operation). The project has numerous EM conductors that are associated with significant magnetic lows of the Wollaston Domain. While the project is outside the current confines of the Athabasca Basin, the area was overlain by Athabasca sandstones historically. Basement rocks on the property include Wollaston Supergroup metasediments and Archean granitoid gneisses, with highly prospective pelitic to psammopelitic gneisses (including graphitic varieties) making up the largest proportion of the basement rocks. Several north-trending faults related to the Tabbernor fault system cross-cut the property.
Previous work on the project includes diamond drilling (12 holes), lake sediment sampling, soil sampling, geological mapping, ground and airborne geophysics, marine seismic, prospecting, and other geochemical sampling, the majority of which was done in the 1980’s and 1970’s. Modern exploration of the property has been limited to geophysics and ground prospecting. As such there is a significant untested potential on the project. Trenching on Cleveland Island uncovered up to 0.31% U3O8 in mineralized pegmatite, and diamond drilling on Gilles Island intersected anomalous uranium, indicating that the basement rocks underling the Usam property are fertile sources of uranium in addition to containing pegmatite- and granite-hosted U-Th-REE mineralization. There are also several sedimentary-hosted base metals (i.e. Cu and Zn) showings on the project and in the surrounding area, which show similarities to the sedimentary-hosted Cu mineralization discovered by Rio Tinto and its partners at Janice Lake further southwest in the Wollaston Domain.
Recently, Skyharbour announced that it has entered into an option agreement with Yellow Rocks Energy Ltd, a private Australian entity, which provides Yellow Rocks an earn-in option to acquire up to 80% interest in the Wallee and Usam Island Uranium Properties located in the Wollaston Domain of Northern Saskatchewan, Canada.
The Option Agreement:
Pursuant to the Agreement, Yellow Rocks may acquire up to a maximum of 80% interest in the Properties by (i) issuing common shares of Yellow Rocks having an aggregate value of AUD $2,025,000; (ii) making a cash payment of AUD $50,000; and (iii) incurring an aggregate of AUD $4,500,000 in exploration expenditures on the Properties.
Schedule to earn up to 80% interest:
|Value of Yellow Rocks Shares Issued
|On Closing (15%)||$50,000||$0||$225,000|
|On or before the first anniversary of Closing (51%) - Phase 1||$0||$1,000,000||$600,000|
|On or before 27 months of Closing (65%) - Phase 2||$0||$1,500,000||$600,000|
|On or before 39 months of Closing (80%) - Phase 3||$0||$2,000,000||$600,000|
Skyharbour will retain an NSR of two percent (2%) on all 12 claims with Yellow Rocks holding a buyback option whereby Yellow Rocks can purchase one percent (1%) of the NSR for CAD $700,000. The Optionee will be the operator at the Properties during the course of the earn-in.
If the Optionee completes the Closing Phase (to earn-in the 15% interest in the Properties) but does not satisfy the requirements to complete Phase 1 (and does not obtain an earn-in interest of 51%) the Optionee will relinquish the Closing Phase interest (being the Optionee’s 15% interest in the Property in consideration for the payment of AUD $1.00, and the Optionee will no longer be entitled to any interest in the Property.
The obligations of the Optionee under this Agreement are subject to and conditional upon the satisfaction of the following conditions precedent:
- Completion of due diligence by the Optionee on the Property to the reasonable satisfaction of the Optionee on or before the date of lodgement of the prospectus to be issued by the Optionee in connection with its initial public offering and listing on the ASX (“Prospectus”);
- The Optionee undertaking a capital raising and receiving valid applications under the Prospectus for such amount as required to ensure that the Optionee complies with the ASX Listing Rule 1.3.1 to meet the assets test for listing (net tangible assets of $4,000,000 after deducting costs of the offer);
- The Optionee receiving conditional approval from the ASX for its securities to be admitted to official quotation on the Exchange
- The Optionee being satisfied (at its sole direction) that there is no breach of the representations, warranties or covenants given by the Optionor under this Agreement;
- Execution by the Optionor of such form of restriction agreement with respect to the Shares as may be required by the ASX;
- The Parties (as applicable) obtaining all necessary regulatory and shareholder approvals pursuant to the ASX Listing Rules, the Corporations Act 2001 and their constituent documents, to allow the Parties to lawfully complete the matters set out in this Agreement;
If these Conditions Precedent are not satisfied on or before 5:00pm (WST) on the date which is nine (9) months from the date of execution of this Agreement either Party may terminate this Agreement by notice in writing to the other Party, in which case, the agreement constituted by this Agreement will be at end and the Parties will be released from their obligations under this Agreement.