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Valor Sells Peruvian Copper to Focus on Canadian Uranium

5 July 2023 13:12
ASX: VAL

Looking to maintain focus on its extensive uranium portfolio in Canada’s prolific Athabasca Basin, Valor Resources has agreed to sell its Picha and Characque Copper Project in Peru to ASX-listed explorer, Firetail Resources.

Cash Injection

The two companies have executed a binding term sheet for Firetail to acquire up to an 80 per cent interest in the copper projects for a A$550,000 dollar cash payment on top of an additional $200,000 dollar exclusivity fee within five days of the execution of the term sheet for Firetail being granted an exclusive 90-day due diligence period.

On top of this, Valor will also receive further consideration in the form of 15 million Firetail shares and 20 million performance rights subject to certain vesting conditions and Firetail shareholder approval, with this consideration equivalent to a 20.58% shareholding in Firetail on a fully-diluted basis.

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Figure 1: Location of the two projects

Valor will retain a 20 per cent holding in the Picha and Characque at a project level, which when combined with the shareholding in Firetail it will gain as part of the transaction gives Valor a considerable amount of exposure to any success generated from these compelling copper projects, while freeing up its resources and assets to focus entirely on its Canadian portfolio.

With its extensive battery metal portfolio targeting nickel, copper, manganese and lithium across Australia, Firetail is well-positioned to make the most of these projects, with Firetail also inheriting Valor’s experienced in-country management and technical team to aid in unlocking the immense potential of these Peruvian projects.

Picha in particular stands on the verge of being drill ready, with Valor having secured approval for its Declaracion de Impacto Ambiental (DIA) for an up to 120-hole drill campaign across the Project, targeting a number of high-value copper-silver-gold targets, including a gold in soil anomaly exceeding 10 parts per billion gold extending approximately 800 metres recently uncovered.

Alongside acquiring its technical team, Valor’s Executive Chairman George Bauk will join Firetail’s board as a director to aid in the transition and future exploration.

Focused on Uranium

The transaction comes as part of the explorers continuing strategy to streamline its portfolio and place significant focus on its priority uranium projects in the Athabasca Basin, with this divestment coming hot on the heels of Valor securing an earn-in deal with leading global gold and copper producer Barrick Gold for up to 70 per cent of the Charaque project, a deal which Firetail will also inherit.

The Company has four projects in the Basin targeting uranium and rare earth elements, which already hosts a number of drill-ready targets set to be tested over the next two years as it looks to crack into uranium’s growing global profiles as yellowcake presents itself as a potential avenue to meet emissions targets while maintaining energy security.

Holding tenure in what is one of the world’s highest-grade sources of uranium at a time when its popularity is on the rise, it is obvious why Valor wants to put all its energy into unlocking the potential of its Canadian portfolio, with the explorer recently extending its Surprise Creek Project by ~20 square kilometres following compelling finds of up to 7.98% U3O8.

Looking Ahead

The Company said that the proposed transaction delivers necessary portfolio simplification that it believes will unlock significant value for its 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 divestments to Barrick and Firetail” Executive Chairman George Bauk said.

“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. We believe that this structures the Company appropriately for the future while crystallising value for shareholders from our efforts in Peru over the past few years.”

“We are very excited about the opportunity to focus our full efforts on these outstanding assets and accelerate exploration activities at a time when investor interest in potential new uranium discoveries and resources has never been stronger.”

VAL’s Australian Stock Exchange-listed share price has risen 33.33 per cent today, currently selling at 0.04c (12:44 pm UTC+ 8 hours).

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