Myriad Uranium (CSE: M; US-OTC: MYRUF) plans to sell its Red Basin project in New Mexico to a new mining tech venture and partner with it on other uranium exploration and development opportunities.
The Canadian uranium explorer said it will sell all claims comprising the property to Subatomic Industries, which is backed by 8VC and Overmatch Ventures, for $2.5 million cash and it will retain a 10% free-carried interest on the project. Myriad acquired the Red Basin project for C$525,000 a year ago, and the transaction now represents a more than sixfold return on invested capital, after accounting for currency differences and excluding the carried interest.
“[The partnership is] producing a wonderful return on capital that is highly accretive for our shareholders, but more importantly, forming a strategic alliance with a new uranium partner, who will advance the project while we maintain exposure to it through our retained interest,” Myriad CEO Thomas Lamb said in a release on Thursday. “The potential for nuclear energy to provide uninterruptible, clean power solutions for the technology sector is attracting a new class of investors into uranium — and into domestic U.S. sources of uranium in particular.”
Uranium sector deals
Myriad’s sale to Subatomic points to a broader shift in dealmaking in the uranium sector where smaller, earlier-stage assets are attracting new types of capital outside traditional mining players.
Shares of Myriad Uranium fell 15% to C45¢ apiece amid a broader market rout, taking its market capitalization down to C$44.1 million.
On the partnership with Subatomic, Lamb said the company will provide more details in due course.
Myriad’s portfolio
Red Basin is one of two uranium projects held by Myriad in the U.S. The property is situated within a district that had minor production in the 1950s. The potential mineral endowment of the district is believed to be up to 45 million lb., according to the New Mexico Bureau of Mines and Mineral Resources.
A sale would allow Myriad to focus on its flagship Copper Mountain project in Wyoming, another site with historical resources. The company said it could be “one of the largest uranium projects in the U.S.” after recently doubling the project’s size.
The company currently holds a 75% interest in Copper Mountain, earned through an option agreement with Rush Rare Metals (CSE: RSH; US-OTC: RSHMF).
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