Terra Uranium signs option deal with CanAlaska for two uranium projects in Saskatchewan

Australia’s Terra Uranium has signed a deal to earn up to an 80% interest in CanAlaska Uranium’s (TSXV: CVV; US-OTC: CVVUF) 100%-owned Waterbury East and McTavish projects in Saskatchewan’s  Eastern Athabasca Basin. 

Under the option agreement Terra can earn an initial 40% stake in the two projects by spending a total of A$75,000 ($67,673) and issuing 9% of its shares. (Terra Uranium plans to list on the Australian Stock Exchange before March 31.)

To earn an additional 20% stake (for a total of 60%), it must pay another A$400,000 ($360,924) and spend A$2.5 million ($2.3 million) on exploration on each project over an 18-month period.

If it chooses to earn another 20% stake, it must deliver a JORC-compliant resource estimate of at least 30 million pounds U308 on either of the two projects and grant CanAlaska a net smelter return (NSR) royalty of 2.25%.  

Cory Belyk, CanAlaska’s CEO, described the partnership as “significant” and noted that the deal would allow the two projects to “move forward toward discovery” with substantial funding “without diluting our shareholders from our core properties.” 

“It brings in a new partnership to CanAlaska with exposure to investment money from the ASX and a strong team at the board level of Terra Uranium, and we bring cash into CanAlaska to further advance other projects in our uranium portfolio,” Belyk told the Northern Miner in an interview.   

The first exploration programs with Terra are expected to begin in early 2022.  

The 2,685-hectare McTavish property is located 5 km northwest of Cameco’s (TSX: CCO; NYSE: CCJ) Millennium uranium deposit. Highlights from previous drilling included 0.05 metres grading 0.13%U3O8 in drill hole WM-09-04. 

Previous drilling at the 1,337-hectare Waterbury East project highlighted faulted and altered basement rocks with uranium enrichment, CanAlaska says. 

Belyk says he expects uranium to play a significant role in the decarbonization of energy production.  

 “The world has a desire to move toward a “dream-state” of global electrification from clean energy and nuclear energy production has to become a larger part of the mix moving forward to achieve this ‘dream.’”  

“There simply is no other base load energy source available today that is reliable and scalable to the level required to meet the expected current and future needs of the world.”  

CanAlaska is currently working with Cameco and Denison Mines (TSX: DML; NYSE: DNN) at two of the company’s properties in the Eastern Athabasca Basin. 

In January 2016, Denison entered into an option agreement with CanAlaska to earn a 75% interest in the Moon Lake South project, located two km west of Denison’s adjacent Wheeler River property.  

Denison completed four drillholes on the project last year, intersecting additional uranium mineralization. Highlights of the drill holes included 0.2 metres grading 0.14% eU308 starting from 488.5 metres in drill hole MS-21-02 and 0.2 metres grading 0.12% eU308 starting from 550.6 metres in drill hole MS-21-06.    

At presstime, CanAlaska was trading at 47.5¢ per share within a 52-week trading range of 37¢ and 84¢.  The company has 97.7 million common shares outstanding for a market cap of $46.4 million.