ASX-listed junior explorer Okapi Resources has scored a potentially company-making package of high-grade brownfields uranium assets in the uranium friendly jurisdiction of the US via an all-scrip acquisition of private Australian outfit Tallahassee Resources.
The Perth-based company will pay the vendors of Tallahassee Resources 33.5 million new Okapi shares and 16.75 million options as consideration for the deal, subject to shareholder and statutory approvals.
Okapi will assume 100 per cent ownership of the mineral rights over the Tallahassee uranium project tenure spanning about 7,500 acres in central Colorado’s prolific Tallahassee Creek uranium district about 140km south-west of Denver.
Also included in the newly acquired Tallahassee Resources portfolio of properties is an option for Okapi to acquire 100 per cent of the Rattler uranium project, including the historical high-grade Rattlesnake open-cut mine in north-eastern Utah.
In tandem with what Okapi management describes as a transformational deal, the company intends undertaking a share placement to sophisticated and professional investors by way of an issue of 14.2 million shares at 20¢ each to raise about $2.84 million.
The capital raise and the acquisition of the Tallahassee assets will expand its issued capital to a tightly held total of about 100 million shares.
Most of the fresh funds – which will increase Okapi’s cash balance to about $6.3 million – will go towards further exploration and development activities at the Tallahassee uranium project.
The project comes with a JORC 2004 mineral resource estimate of 26 million pounds of uranium oxide from ore going at an average grade of 540 part per million uranium oxide, with “significant exploration upside”.
Between 2007 and 2014 former ASX-listed explorer Black Range Minerals consolidated its ownership of mineral rights over several uranium properties in the Tallahassee Creek uranium district and carried out multiple drilling programs.
More than 2,220 historical holes have been drilled in the district for an aggregate coverage of about 350,000m.
Black Range’s exploration work culminated in a JORC 2012 mineral resource estimate – within its landholdings – that was estimated at 90.4 million pounds of uranium oxide from ore grading an average 600ppm uranium oxide across multiple deposits.
The Tallahassee uranium project was previously under Black Range’s banner.
Okapi says its purchase of Tallahassee Resources has been backed by previous founders and management of Black Range. A former company director and head of exploration in the US for Black Range, Ben Vallerine, is set to join Okapi’s board as a Non-Executive Technical Director.
An experienced geologist, Mr Vallerine is also one of the vendors of Tallahassee Resources.
Okapi says its new subsidiary – should the Tallahassee Resources transaction be ratified by Okapi shareholders – hopes to deliver a JORC 2012 resource estimate for the Tallahassee project in coming months and subsequently kick off a 10,000m drilling program.
The program will be aimed at expanding the existing Tallahassee resource base and improving the company’s confidence in the existing resource as well as providing ore samples that can be used for initial metallurgical testwork.
Tallahassee Resources also sees opportunities to pick up additional mineral rights in the uranium district near those it currently holds with a view to expanding resources at under-explored properties via the drill bit or through buying more mature assets.
At Rattler, Okapi has it hands on mineral claims covering about 1,000 acres some 85km north of Energy Fuels’ White Mesa uranium-vanadium plant across the border in Utah. White Mesa is the only operating conventional uranium mill in the US.
The project area includes the old Rattlesnake open-pit mine, which coughed up a total of 285,000 tonnes of ore grading about 2,800ppm uranium oxide and 10,000ppm vanadium oxide for 1.6 million pounds of uranium oxide and 4.5 million pounds of vanadium oxide.
It was discovered around 1948 and produced until about 1954.
With uranium prices strengthening and the US Government reaffirming its support for nuclear energy, Okapi’s early drilling results from Tallahassee later this year will no doubt be closely watched by punters.
Okapi Resources Executive Director Dave Nour said: “This is a transformational opportunity for Okapi to become one of the most prominent uranium developers in the world. Through this acquisition, Okapi is perfectly placed to capitalise on the strengthening uranium market.”
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
