CanAlaska’s Waterbury project in Canada. Credit: CanAlaska Uranium.

CanAlaska Uranium has signed a letter of intent (LOI) with Australia’s Terra Uranium, whereby the latter would earn interests in CanAlaska’s three uranium projects in Canada.

According to the LOI, Terra will have the option to earn an interest of up to 80% in the Waterbury East and McTavish projects, as well as up to 20% in the Waterbury South project.

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Covering a total area of 5,010ha, the three projects are located in the Eastern Athabasca Basin in Saskatchewan.

CanAlaska CEO Cory Belyk said: “CanAlaska is pleased to work with Terra Uranium, a pending new Australian-listed player in the Basin, to help fund the next stage of exploration on these highly prospective Eastern Athabasca uranium projects.

“This significant investment by Terra will allow CanAlaska to achieve its objective of being a hybrid explorer and project generator by moving these projects toward discovery and preserving upside without diluting current shareholders.”

To acquire up to 80% in the Waterbury East and McTavish projects, Terra will make a cash payment of $181,859 (A$250,000), issue 6% worth of common shares, incur $1,818,590 (A$2,500,000) in exploration expenditures, in addition to delivering and filing a JORC compliant resource.

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These will be carried out in three defined earn-in stages on each of the two projects.

To earn up to 20% in the Waterbury South Project, Terra is required to pay $181,859 (A$250,000) in cash, issue 6% worth of common shares, and incur $1,091,150 (A$1,500,000) in exploration expenditures within 12 months of ASX listing date.

Subsequently, the two parties will form a joint venture and co-contribute on a simple pro-rata basis or dilute on a pre-defined straight-line dilution formula.

Terra is due to be listed on ASX by 31 December 2021.