Foremost Lithium Resource & Technology has signed an option agreement with Denison Mines, which will allow Foremost to potentially acquire up to a 70% stake in ten uranium exploration properties in the Athabasca Basin, Saskatchewan, for up to C$30m ($22.3m).
Covering an area of 330,000 acres, the properties include Epp Lake, Hatchet Lake, Marten, Murphy Lake South, Torwalt Lake, Turkey Lake and Wolverine.
This agreement outlines a three-phase process for Foremost to increase its stake in the projects, with various commitments at each stage, including share issuance, cash payments and exploration expenditures.
The first phase requires Foremost to issue more than one million common shares to Denison, appoint a technical advisor and enter an investor rights agreement by 7 October 2024.
This phase would grant Foremost a 20% interest in the properties, with a slightly lesser percentage for the Hatchet Lake joint venture (JV).
To progress to the second phase, Foremost must pay Denison C$2m and incur C$8m in exploration expenditures within 36 months post the effective date.
Failing to meet these conditions would result in Foremost forfeiting its interests in the properties.
The final phase allows Foremost to earn an additional 19% interest by paying Denison C$2.5m and spending a further C$12m on exploration within 36 months of completing Phase II.
If Foremost does not fulfil these conditions, it will lose a portion of its interests, and Denison will regain a 51% stake and operatorship.
Upon successful completion of either Phase 2 or Phase 3, the parties will establish a JV for each property.
The transaction currently awaits regulatory approval.
Foremost president and CEO Jason Barnard said: “Uranium prices have seen significant strength in recent years driven by the global demand for clean energy, which has been reinforced by supportive government policies and geopolitical events underscoring the need for reliable western uranium supply.
“This collaboration will advance significant near-term exploration and development efforts across numerous high-quality exploration projects to maximise the properties’ potential for the benefit of both Foremost and Denison shareholders.”
