PERTH (miningweekly.com) – ASX-listed Valor Resources has signed a binding term sheet with explorer Firetail Resources to sell up to an 80% interest in its Picha copper/silver project and the Charaque copper project in Peru.

Under the term sheet, Firetail will acquire up to 80% of the issued share capital of Valor subsidiary Kiwanda, which holds the mining concessions for the two projects.

Firetail will pay an initial A$200 000 in cash on execution of the term sheet, and will pay a further A$550 000 in cash and issue 15-million shares on the completion of the proposed transaction, subject to shareholder approval. A further 20-million performance rights convertible into Firetail shares will also be issued subject to shareholder approval and on the satisfaction of specific vesting conditions.

“This acquisition has strategic importance to Firetail as it complements our existing assets and provides near-term exposure to the copper market with drilling commencing in the short term with an experienced ‘ready to go’ team in Peru,” said Firetail executive chairperson Brett Grosvenor.

“The Picha project is drill ready following a significant exploration programme undertaken over the past 18 months which has identified large numbers of significant targets through surface work coupled with IP/resistivity surveys. The structure of the deal is complementary to all parties involved and ensures that development of the assets is aligned with the vendor and company strategic directions whilst providing a cash neutral purchase position to Firetail shareholders as we receive a portion of the Charaque farm-in payments over the next four years.”

Valor told shareholders that once completed, the transaction would simplify the company’s exploration portfolio, with the Peru assets to be housed in a focused ASX-listed explorer with the resources and financial capability to execute drilling programmes and unlock the significant potential of these assets.

At the same time, the proposed fransaction will allow Valor to focus on the substantial potential of its portfolio of high-grade uranium and rare earth assets in the Athabasca basin in Canada. The Athabasca basin is the world’s highest-grade source of uranium, with an average grade of around 2% uranium oxide across the basin, approximately 10 to 20 times the global average. Despite this, the area has only seen sporadic modern exploration over the past 40 years,  Valor said in a statement.

For some time, Valor has been distinguished by having an extraordinarily asset-rich portfolio, which includes high-potential mineral assets in Canada’s Athabasca basin and southern Peru. The proposed transaction delivers a necessary portfolio simplification that we believe will unlock significant value for our shareholders,” said executive chairperson George Bauk.

“Having identified significant potential across both the Picha and Charaque copper projects over the past few years, we believe that the best way to move these assets forward is via the divestments to Barrick and Firetail. This will allow us to focus on our high-potential Canadian uranium portfolio while retaining exposure to the upside in Peru via a free-carried interest in these assets. We believe that this structures the company appropriately for the future while crystallising value for shareholders from our efforts in Peru over the past few years.

“Uranium is an essential part of the energy balance moving forward if the world is going to get anywhere near meeting its net-zero ambitions. The recent increases in the uranium spot price are indicative of the excitement that is rapidly building in the uranium sector globally.

“We are very excited about the opportunity to focus our full efforts on these outstanding assets and accelerate exploration activities at a time when investor interest in potential new uranium discoveries and resources has never been stronger. The future for Valor is very bright and I am looking forward to concluding this transaction and advancing the company to the next level.”

Following the transaction, Bauk will join the Firetail board as a director.