West Perth-based Northern Uranium has entered into an agreement to combine and advance its rock phosphate projects with Korean-based FSL Resources.
West Perth-based Northern Uranium has entered into an agreement to combine and advance its rock phosphate projects with Korean-based FSL Resources.
The announcement is below:
Northern Uranium Limited (ASX: NTU) is pleased to advise its has entered into a non-binding Heads of Agreement ("HOA") with Korean based fertiliser exploration and trading company FSL Resources Limited ("FSL") to combine and advance their rock phosphate projects.
Under the agreement, the two companies will combine their respective phosphate interests into a single and dedicated corporate vehicle, with more than 38,000km2 of prospective phosphate licences in the Northern Territory.
The combination will create a new major player in rock phosphate in Australia, and allow Northern Uranium to remain focused on advancing its uranium projects, and in particular the Gardiner-Tanami Project.
FSL established an Australian subsidiary FSL World Holdings Pty Ltd ("FSLWH") in 2005 to identify prospective rock phosphate exploration and development opportunities in the Northern Territory. FSLWH had the advantage of moving early in the search for rock phosphates in the region and was successful in acquiring approximately 32,000km2 of exploration licences in the Northern Territory some of which cover ground with historical records of phosphate rock exploration.
The areas were selected on the basis of historical rock phosphate exploration results and a more recent Northern Territory Geological Survey compilation of data from numerous water bores identifying areas with enriched phosphatic sedimentary units. The most advanced of FSLWH's projects is the Barkly Project comprising two granted exploration licences approximately in the centre of the Georgina Basin and immediately north of Minemakers' Wonarah deposit (Figure 1). Historical drilling confirms the phosphate potential of these tenements.
Northern Uranium began acquiring tenements for phosphate exploration in the Northern Territory in 2008, having recognised the potential for phosphate mineralisation in the Kurundi Project tenements. Northern has now assembled a large phosphate exploration package comprising 14 exploration licences covering a total of 6,400km2 within the Georgina Basin and the Amadeus Basin.
Under the terms of the HOA Northern Uranium will, subject to due diligence, vend into FSLWH its phosphate rock tenement and intellectual property interests in return for shares. Upon completion, Northern Uranium will hold approximately 30% of the issued capital of FSLWH and two directors from Northern Uranium will be appointed to FSLWH's Board. Following due diligence a binding agreement is expected to be finalised by the end of the December quarter.
If the transaction proceeds, Northern Uranium will contribute $65,000 of seed capital to FSLWH, and current FSLWH shareholders will co-invest $65,000 for working capital and for a small drilling program on the highly prospective Barkly tenements. FSLWH will then raise additional funds independent of Northern Uranium which will focus on its uranium exploration activities.
Commenting on the proposed business combination Northern Uranium's Executive Chairman Mr Kevin Schultz said:
"FSLWH through its Board of Directors brings experience and strong relationships in the fertiliser industry to the proposed business combination and Northern Uranium sees this transaction as an excellent way for our Company to derive value from non-core phosphate exploration tenements.
"We look forward to working with FSLWH's Board and Management to create a new force in rock phosphate exploration and development," Mr Schultz said. "Northern Uranium remains committed to uranium exploration with our key focus being the Gardiner-Tanami Project, and the proposed phosphate transaction reinforces that strategy."
