Cosa Resources Corp. (CVE: COSA) (OTCMRKTS: COSAF) is buying three of Denison Mining‘s (TSE: DML) (NYSEAmerican: DNN) uranium exploration projects in the Eastern Athabasca Basin.
The deal includes the formation of three specific joint ventures between Cosa and Denison, according to a Wednesday press release.
The projects include the Murphy Lake North Project, situated within four kilometres of IsoEnergy Ltd‘s (TSE: ISO) (OTCMKTS: ISENF) Hurricane Deposit, the Darby Project, positioned ten kilometres west of Cameco Corporation‘s (NYSE: CCJ) (TSE: CCO) Cigar Lake Mine, and the Packrat Project, located 19 kilometres southwest of the Rabbit Lake Mill.
Murphy Lake North covers part of the Larocque Lake trend and lies 3.2 kilometres east of the Hurricane deposit.
The Hurricane deposit was discovered and delineated for IsoEnergy by current members of Cosa’s management, board, and advisors between 2018 and 2022.
Meanwhile, the Darby Project lies ten kilometres west of the Cigar Lake Mine and 17 kilometres north of the McArthur River Mine. It is interpreted to contain over 25 kilometres of conductive strike length, including the 8-kilometre-long 95B trend, which runs parallel to the Cigar Lake – Tucker Lake trend.
Additionally, the Packrat Project is located 28 kilometres east of the Cigar Lake Mine and 19 kilometres southwest of the Rabbit Lake Mill. It covers a prominent magnetic break and a basement-hosted resistivity low trend along magnetic lineaments related to the Cigar Lake – Tucker Lake magnetic low trend.
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Denison will get to nominate one direct to Cosa’s board
The Royalty Agreements will grant Denison a 2 per cent Net Smelter Royalty (NSR) on the Darby and Packrat Projects, and a 0.5 per cent NSR on the Murphy Lake North Project. Cosa will also have the right to repurchase 5 per cent of the royalties on the Darby and Packrat Projects in exchange for a cash payment of CAD$2 million per project.
Furthermore, the Investor Rights Agreement will ensure that, as long as Denison holds at least 5 per cent of the issued and outstanding Common Shares, it will have a pre-emptive right and top-up rights allowing it to maintain and/or acquire up to a 19.95 per cent interest in Cosa.
Additionally, Denison will have the right to nominate one director to Cosa’s board as long as it holds at least 5 per cent of the issued and outstanding Common Shares, and an additional director if Denison holds at least 10 per cent of the issued and outstanding Common Shares.
“All three projects offer tremendous upside potential for our shareholders,” said Keith Bodnarchuk, Cosa President and CEO.
“Most notably, Murphy Lake North is within four kilometres of and on trend with IsoEnergy’s Hurricane Deposit – discovered in 2018 by Cosa’s management team and currently the highest grade Indicated Mineral Resource for uranium on the planet at a staggering average grade of 34.5 per cent U3O8.”
Denison will have the right to nominate one director to Cosa’s board as long as it holds at least 5 per cent of the issued and outstanding common shares, and an additional director if Denison holds at least 10 per cent of the issued and outstanding common shares.
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Denison celebrates seven decades in uranium mining
Additionally, Cosa will be required to issue Denison CAD$2.25 million in deferred consideration shares within a five-year period. Cosa must also fund 100 per cent of the next CAD$1.5 million in exploration expenditures on Murphy Lake North by December 31, 2027, and 100 per cent of the next CAD$5 million in exploration expenditures on Darby by June 30, 2029.
This year, Denison also celebrates its 70th anniversary in uranium mining, exploration, and development, which began in 1954 with the company’s first acquisition of mining claims in the Elliot Lake region of northern Ontario.
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joseph@mugglehead.com
