Denison Mines has announced an agreement with Cosa Resources to form three uranium exploration joint ventures in the eastern part of the Athabasca Basin, northern Saskatchewan.
The agreement allows Cosa to acquire a 70% interest in Denison's Murphy Lake North, Darby and Packrat properties, marking a significant step in uranium exploration in the region.
Cosa will issue approximately 14.2 million common shares to Denison, representing a 19.95% ownership interest in Cosa post-transaction.
Additionally, Cosa will provide $2.25m (C$3.15m) in deferred equity consideration and commit to $6.5m in exploration expenditures at the Murphy Lake North and Darby properties to retain its operatorship and ownership level.
Denison will maintain a minimum 30% direct interest in the properties and become Cosa's largest shareholder.
The company will also secure strategic pre-emptive rights and a buydown right to increase its interest in the Darby property. A royalty will be retained by Denison on each of the properties.
Cosa has the option to reduce the net smelter royalty on Darby and Packrat to 1% for a cash payment of C$2m per project.
The company must also issue Denison an additional C$2.25m in deferred consideration shares within five years from the transaction's closing date.
Cosa is required to fund C$1.5m in exploration expenditures on Murphy Lake North by 31 December 2027 and C$5m on Darby by 30 June 2029.
Failure to meet these conditions will increase Denison's ownership in the respective properties to 51%, making Denison the operator.
Denison has a buydown right on Darby, allowing it to reclaim up to a 60% interest until its interest falls below 10% or commercial production of 500,000 pounds of triuranium octoxide is achieved.
Cosa will appoint a Denison-nominated technical advisor for five years or until all obligations are fulfilled.
The transaction's completion is subject to conditions, including regulatory approvals from TSX Venture Exchange and other applicable authorities.
Upon closing, an Investor Rights Agreement will be established, granting Denison rights to maintain up to a 19.95% interest in Cosa and nominate directors to Cosa's board.
