Valor Resources (ASX:VAL) has relinquished the majority of its ownership of copper assets in Peru, finalising the sale to Firetail Resources (ASX: FTL) today and shifting its focus to uranium exploration in Canada’s Athabasca Basin, as previously outlined in June.
The End of the Road
Firetail’s acquisition of Valor’s Picha and Charaque Projects in Peru have been an ongoing process, reaching several milestones throughout the year.
Figure 1: Picha and Charaque Copper Projects in Peru
In August, shareholders of Firetail Resources approved the issue of shares and performance rights relating to the acquisition of up to 80% of the issued share capital of Kiwanda S.A.C., a wholly-owned subsidiary of Valor, which holds the mining concessions that make up the Picha and Charaque Copper Projects in southern Peru.
The acquisition was publicly disclosed earlier this year in July, and with all necessary conditions met, all parties are now able to proceed in accordance with the binding terms sheet dated June 30, 2023.
Today, Valor announced the successful completion of the sale of an initial 60% interest in its Picha Copper-Silver Project and Charaque Copper Project in southern Peru to Firetail Resources.
The Final Agreed Terms
The total payment to Valor consists of a $200,000 cash payment made upon the execution of the binding terms sheet and an additional $550,000 in cash, along with the issuance of 15,000,000 fully paid ordinary shares in the Company at a deemed issue price of $0.10 per share, securing an initial 60% shareholding interest in Kiwanda.
The acquisition agreement also encompasses the issuance of 20,000,000 performance rights that can be converted into shares once the vesting conditions are met. Upon satisfaction of these conditions, Firetail will secure an additional 20% interest in Kiwanda, bringing their total ownership to 80%.
Firetail intends to initiate drilling at the Picha Project in early October this year.
Looking to the Future
Through the divestment of its Picha and Charaque Copper Projects in Peru, Valor is strategically streamlining its portfolio, directing its attention towards the exploration of promising high-grade uranium resources in Canada.
This transition is well-timed, capitalising on the surging uranium price propelled by the momentum of green energy initiatives and increased investments in nuclear power.
Valor’s Canadian uranium projects include:
Hook Lake Uranium Project: Valor holds the option to acquire an ownership interest of up to 80% in this strategically positioned project, located 60km to the east of the Key Lake Uranium Mine in northern Saskatchewan. This extensive tenement encompasses 258 square kilometres, comprising 16 adjacent mineral claims that host multiple promising areas with potential for uranium mineralsation.
Cluff Lake Uranium Project: One of Valor’s largest projects, this 100% equity interest encompasses 19 contiguous mineral claims spanning over 575 square kilometres in northern Saskatchewan, situated just 7 kilometres east of the former-producing Cluff Lake Uranium Mine.
Athabasca Basin: Valor holds six more projects within the Athabasca Basin, where it maintains a 100% equity interest, encompassing 18 mineral claims across 169 square kilometres. These projects, including Hidden Bay, Surprise Creek, Pendleton Lake, Beatty River, Smitty, and Lorado, boast a range of established drill-ready targets scheduled for testing in 2023 and 2024, with some already indicating the presence of uranium and copper.
Figure 2: Valor Resources projects in the Athabasca Basin, Canada
Valor’s Executive Chairman George Bauk expressed satisfaction with the Company’s successful fulfilment of all necessary conditions for the sale to Firetail.
“The transaction simplifies our portfolio, allowing Valor to focus on the substantial potential of our portfolio of high-grade uranium and rare earth assets in the Athabasca Basin in Canada at a very favourable time in the market cycle for these commodities,” he said.
“At the same time, Valor will retain significant exposure to the future upside in Peru via our shareholding in Firetail and our retained interest in the projects.”
VAL’s Australian Stock Exchange-listed share price is currently selling at $0.004 (11:15am UTC+ 8 hours).