Strathmore Minerals (STM-V) will form a joint venture with Japan-based Sumitomo to develop its Roca Honda project in New Mexico.
Sumitomo is paying Kelowna-based Strathmore US$1 million for entering into the joint venture.
In a release issued by Strathmore, the company says the purpose of the joint venture is to complete a feasibility study. Sumitomo will contribute 40% of the cost of the study.
If the companies decide the mine is a go, Sumitomo will fund more than US$50 million in development costs of the Roca Honda Mine and will market the U3O8 that comes out of the mine.
The deal also gives Sumitomo the right to enter into any new projects that Strathmore may get into as a joint venture.
Further details of the agreement were withheld for “competitive reasons” the release stated.
“The combination of an internationally recognized credible financial partner and our strong technical team provides the resources necessary to advance the Roca Honda project to production, said Strathmores chairman and chief executive Dev Randhawa in a prepared statement. We look forward to Sumitomo’s ongoing contribution and partnership.”
Sumitomos business includes the importing and exporting of a wide range of goods and commodities, and also providing a wide range of services.
The company is invested in metals, transportation and construction systems, machinery and electricity, media, electronics and network, chemicals, mineral resources and energy, consumer goods and services, materials and real estate, and finance and logistics.
The Grant’s Mineral Belt in New Mexico, where Roca Honda is situated, has put out over 300 million lbs of uranium production, and was the largest uranium district in the world during the last uranium cycle.
The Roca Honda deposit has a measured and indicated resource of 17.5 million lbs. grading 0.23% U3O8 and an additional inferred resource of 15.8 million lbs. grading 0.17% U3O8.
In Toronto on July 26 Strathmore shares were off 7% or 23 to $3.10 on a volume of 411,000 shares.
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