Perth-based uranium explorers Atom Energy Ltd and NuPower Resources Ltd have entered into a joint venture deal to advance exploration of Atom's Natve Gap project, 120 km north of Alice Springs.
Under the agreement, NuPower must spend $150,000 on an aerial electromagnetic survey, as well as a water sampling program, geological mapping and sampling within 12 months of the commencement date.
NuPower will earn a 51 per cent stake in the tenement after spending $1 million on exploration within three years of the commencement date, earning a further 19 per cent within five years after spending $2 million.
When NuPower has earned a 70 per cent interest in the tenement, the parties will form a joint venture with NuPower as first manager and will contribute to ongoing exploration expenditure pro rata to their equity in the tenement.
The full text of an Atom announcement is pasted below
Uranium exploration company Atom Energy Limited (ASX: AXY, "Atom") today announced an agreement in principle with NuPower Resources Limited (ASX: NUP, "NuPower") to enter into a farm-in and joint venture agreement to advance the exploration of Atom's Native Gap Project, EL 24287,approximately 120km north of Alice Springs.
Under the terms of the agreement, NuPower must spend a minimum of $150,000 on an airborne electromagnetic (AEM) survey, water sampling and geological mapping by 12 months after commencement of the agreement.
NuPower may also earn 70% equity in the Native Gap project by sole expenditure of $2 million within five years after commencement of the agreement.
Native Gap covers an area of 1,582km2 over the eastern end of the Ngalia Basin and is one of four projects acquired by Atom at the time of its ASX listing in June 2007. While the project has not been systematically explored for uranium mineralisation, anomalous uranium and base metal values have been reported from outcrops in the area.
Atom's Managing Director, Mr David Hamlyn, said the joint venture agreement recognised the potential of the Native Gap Project.
"We are very pleased to have attracted NuPower to invest in this project," said Mr Hamlyn.
"The company has experience in the exploration of uranium projects in the region having recently completed AEM survey work at its Yalyirimbi EL project, north-west of Native Gap resulting in the identification of interpreted palaeo-drainage systems."
"For Atom, this agreement introduces a partner that will accelerate exploration at Native Gap, enabling us to continue our encouraging exploration programme at the Cleo's Uranium Project where resource drilling is currently in progress."
"In addition, the agreement will enable us to direct funding to our newly acquired tenements in the Tennant Creek and Alice Springs regions."
The Native Gap Project is a grass roots exploration opportunity, located north of NuPower's Exploration Licence No. 24956 (Burt Plain) and Exploration Licence No. 25325 (Yambah).
Appendix 1 - Terms of the JV Agreement with NuPower:
- NuPower will spend a minimum of $150,000 on an aerial electromagnetic survey, water sampling program, geological mapping and sampling on the Tenement within 12 months of the Commencement Date;
- If NuPower has spent $150,000 and decides to continue sole expenditure on the Tenement, it may earn a 51%interest in the Tenement after sole expenditure of a total of $1,000,000 on exploration within 3 years from the Commencement Date;
- NuPower may earn a further 19% equity in the Tenement by sole expenditure on exploration of a total of $2,000,000 within 5 years from the Commencement Date;
- When NuPower has earned a 70% interest in the Tenement, the parties will form a joint venture with NuPower as first manager and will contribute to ongoing exploration expenditure pro rata to their equity in the Tenement.