Under the terms of the accord, U3O8 can explore the provincial company’s mineral properties are adjacent to U3O8’s Laguna Salada uranium deposit.
The agreement also provides for the companies to form a joint venture on a larger Laguna Salada Deposit if resources are defined on the concessions of the provincial petroleum and mining company.
U3O8 will also have an option to explore and define resources on the provincial company’s three properties with an investment of $3m, for over three years.
U3O8 president and CEO Dr. Richard Spencer said: "The depth of the current resource cycle provides a stark reminder that only deposits with the lowest production costs continue to be profitable at cyclical bottoms.
"With a cash cost of production of approximately US$22 per pound of uranium defined in the recently completed preliminary economic assessment ("PEA"), the Laguna Salada Deposit would be among the uranium industry’s lowest-cost producers.
"For example, doubling the deposit’s size and plant throughput would increase the project’s net present value ("NPV") by about 230% to US$184 million1. So our focus at Laguna Salada is now on resource expansion.
"The addition of these new concessions could contribute to more than doubling the size of the resource at Laguna Salada and we look forward to advancing the project in association with Chubut’s provincial petroleum and mining company."
