The Sun Dog project was historically mined for uranium in Canada. Credit: RHJPhtotos/Shutterstock.com.

TSX-listed uranium exploration company Standard Uranium has signed a letter of intent (LOI) with International Sustainable Energy Mining (“optionee”) to divest its Sun Dog uranium project in the Athabasca Basin, Canada.

International Sustainable Energy Mining will be granted the option to acquire the project after conducting three years of exploration programmes and making a series of cash and equity payments.

During the exploration period, Standard Uranium will act as the operator of the Sun Dog programmes.

According to the LOI, International Sustainable Energy Mining will pay $200,000 in cash, $200,000 worth of shares and $2m for exploration expenditures in the first year.

That will be followed by $250,000 of cash, $250,000 worth of shares and $4m towards exploration expenditure in the second year. In the third and final year, the cash payment and shares issue will amount to $300,000 each along with $3.5m in exploration expenditures.  

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In total, International Sustainable Energy Mining will pay $750,000 in cash, issue $750,000 worth of shares and pay $9.5m in exploration costs.

Furthermore, the company will have to complete a going-public transaction within 60 days to exercise the option. If the option is exercised, Standard Uranium will retain a 2% net smelter return royalty on the project, half of which can be purchased before commercial production begins, by paying $1m in cash.

Standard Uranium CEO chairman Jon Bey said: “The company is pleased to announce our first property transaction since switching to a project generator business model in July. We are excited to confirm the Sun Dog project will have three additional years of exploration by our technical team while being funded by our optionee.

“The Sun Dog project has exceptional potential for a high-grade uranium discovery, and we are looking forward to a 2024 drill programme.”

The 19,604-hectare Sun Dog project is located along the north-western edge of the Athabasca Basin and includes nine mineral claims located near Uranium City. It has the historic Gunnar uranium mine in the Beaverlodge district, where uranium mining took place between 1953 and 1982.