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Firetail Acquires 80% Interest in Valor’s Peruvian Copper Projects

22 August 2023 12:04
ASX:THB

Shareholders of Firetail Resources (ASX:FTL) have voted to approve the issue of shares and performance rights relating to its acquisition of up to 80% of the issued share capital of Kiwanda S.A.C., a wholly-owned subsidiary of Valor Resources (ASX:VAL) which holds the mining concessions that make up the Picha and Charaque Copper Projects in southern Peru.

The Deal

The acquisition was originally proposed earlier this year in July, with final approval from shareholders being announced after the ASX closed yesterday.

Consideration within the acquisition agreement comprises of $550,000 in cash, 15 million Firetail shares and 20 million performance rights subject to certain vesting conditions.

Additionally, as part of the agreement, George Bauk, the Executive Chairman of Valor, will join the Firetail Board in the capacity of Director.

The acquisition facilitates knowledge transfer, as Firetail gains access to Valor’s seasoned in-country management and technical team, along with the recently disclosed Earn-in Agreement involving Barrick Gold Corporation, a prominent global gold and copper producer.

Other equity considerations factored into the agreement include Valor’s ownership of 20.58% shareholding in Firetail on a fully-diluted basis, enabling Valor to benefit from the potential upside returned by the transferred assets, with the Company additionally retaining a 20% project-level interest.

Final drilling permits have now been secured for Valor’s Picha Project, with the maiden 5000m diamond drilling program focused on uncovering copper potential in the area set to commence in October 2023. It includes up to 120 holes, comprising up to 40 drill platforms drilling three holes each.

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Figure 1: Charaque Project location relative to Valor’s flagship Picha Copper Project in Peru

Looking Forward

With the acquisition, Valor strategically shifts its focus, divesting its portfolio and directing exploration endeavours towards its promising and ready-to-drill uranium projects in Canada’s Athabasca Basin, capitalising on the current upswing in uranium prices and heightened investor enthusiasm for the sector.

Notably, power utilities’ needs are predominantly met by the world’s uranium mines, which contribute 90% of the necessary supply.

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Figure 2: Valor Resources projects in the Athabasca Basin, Canada

Renowned for housing the planet’s most enriched uranium reserves, the Athabasca Basin boasts an extraordinary average grade of around 2% U3O8 across its expanse, dwarfing the global average by approximately 10-20 times. Despite sporadic modern exploration in the last four decades, this region presents an extensive untapped potential for discovery, a prospect that Valor aims to harness.

Within the Athabasca Basin, Valor owns four key projects, with a series of established drill-ready targets planned for testing in 2023 and 2024, some of which have already reported uranium and copper detection.

Valor intends to provide an update regarding its forthcoming exploration activities in Canada in the near future.

VAL’s Australian Stock Exchange-listed share price has risen 33.33% and is currently trading at $0.004 (11:45am UTC+ 8 hours).

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