Purepoint Uranium Group Inc. (TSXV: PTU) (OTCQB: PTUUF) (the “Company” or “Purepoint“) today announced that it has entered into an option agreement (the “Option Agreement“) with a wholly-owned subsidiary of Foran Mining Corporation (TSX: FOM) (“Foran”) pursuant to which Purepoint granted options to Foran to acquire up to 100% interest in Purepoint’s Denare West Project located in east-central Saskatchewan, approximately 55 kilometres west-southwest of Flin Flon, Manitoba (the “Property“). The Property is adjacent to and on trend with Foran’s McIlvenna Bay project.
Concurrently with the execution of the Option Agreement, Foran has agreed to invest $350,000 in a non-brokered private placement of 7,000,000 common share units (each, a “Unit“) of Purepoint at a price of $0.05 per Unit (the “Private Placement“). Each Unit is comprised of one common share of Purepoint and one common share purchase warrant exercisable at a price of $0.07 per share for a term of two years from the date of issue. The closing of the Private Placement is subject to approval by the TSXV. Purepoint intends to use the net proceeds of the Private Placement for general working capital purposes.
“We are excited to contribute to the Foran narrative, particularly their development of the region’s largest undeveloped VHMS deposit. We look forward to the work they will be carrying out on the Denare West property and its potential to add value to this already significant mining project.” said Chris Frostad, President & CEO of Purepoint. “We also appreciate Foran’s investment in the equity of our company as part of this transaction and mutual exposure to our respective efforts here in Saskatchewan.”
Pursuant to the Option Agreement,
- Foran has been granted the option (the “First Earn-in Option“) to acquire a 51% beneficial interest in the Property by incurring a total of $3,000,000 in qualifying exploration expenditures (“Expenditures“) on the Property over a period of up to four years from the effective date of the Option Agreement (the “First Expenditure Period“).
- Following the exercise of the First Earn-in Option, Foran will have the option (the “Second Earn-in Option“) to acquire an additional 29% beneficial interest in the Property by incurring an additional $3,000,000 in Expenditures on the Property over a period of up to two years following the end of the First Expenditure Period.
- Following the exercise of the Second Earn-in Option, Foran will have the final option to acquire the remaining 20% interest in the Property by making a payment in the amount of $10,000,000 (the “Final Purchase Option Price“) to Purepoint and granting a 2% net smelter returns royalty (“NSR“) to Purepoint.
- Foran has a multi-stage option to buy back the NSR royalty from Purepoint: initially, it can repurchase 1% NSR for $1,000,000 (the “First Royalty Option“) at any time before deciding to operate a mine commercially on the Property. Following this, subject to exercising the First Royalty Option and after 60 months of NSR payments, it has the option (the “Second Royalty Option“) to buy an additional 0.5% NSR for another $1,000,000. Finally, after 120 months of NSR payments and exercising the Second Royalty Option, it can acquire the remaining 0.5% NSR for $1,000,000 (the “Final Royalty Option Price“).
- Subject to the stock exchange approval and satisfaction of certain other conditions set out in the Option Agreement, Foran may pay the Final Purchase Option Price, the First Royalty Option Price, the Second Royalty Option Price and the Final Royalty Option Price by issuing common shares (“Foran Shares“) to Purepoint at a deemed price per share that is equal to the 20-trading day volume weighted average price of Foran Shares immediately preceding the date of the notice of exercise of the applicable option.
- At the end of the earn-in phases, if Foran does not elect to acquire Purepoint’s remaining interest in the Property, Foran and Purepoint will form a joint venture (the “Joint Venture“) whereby Foran will fund all operations of the Joint Venture until it completes a pre-feasibility study with respect to the Property.
Figure 1: Denare West Project Location
Figure 2: Compilation Map of Denare West Project showing 2022 Vertical Gravity Results
The transactions contemplated in the Option Agreement constitute a “Reviewable Transaction” under the policies of the TSXV and remain subject to approval by the TSXV. The Option Agreement shall become effective upon closing of the Private Placement and receipt of all requisite approvals from the TSXV.
About Purepoint
Purepoint Uranium Group Inc. (TSXV: PTU) (OTCQB: PTUUF) actively operates a uranium exploration pipeline of nine advanced projects in Canada’s Athabasca Basin. In addition to its flagship joint venture project at Hook Lake with partners Cameco and Orano and a second joint venture with Cameco at Smart Lake, Purepoint also holds seven 100% owned projects with proven uranium rich targets. With an aggressive exploration program underway on multiple projects, Purepoint is emerging as the preeminent uranium explorer in the world’s richest uranium district.
About Foran Mining
Foran Mining is a copper-zinc-gold-silver exploration and development company, committed to supporting a greener future, empowering communities and creating circular economies which create value for all its stakeholders, while also safeguarding the environment. The McIlvenna Bay Project is located entirely within the documented traditional territory of the Peter Ballantyne Cree Nation. Foran Mining also owns the Bigstone Project, a resource-development stage deposit located 25km southwest of its McIlvenna Bay project.
McIlvenna Bay is a copper-zinc-gold-silver rich VHMS deposit intended to be the centre of a new mining camp in a prolific district that has already been producing for 100 years. McIlvenna Bay sits just 65km West of Flin Flon, Manitoba and is part of the world class Flin Flon Greenstone Belt that extends from Snow Lake, Manitoba, through Flin Flon to Foran Mining’s ground in eastern Saskatchewan, a distance of over 225km.
McIlvenna Bay is the largest undeveloped VHMS deposit in the region. Foran Mining announced the results from its feasibility study on February 28, 2022, outlining that current mineral reserves would potentially support an 18-year mine life producing an average of 65 million pounds of copper equivalent annually. Foran Mining filed a NI 43-101 Technical Report for the McIlvenna Bay Feasibility Study on April 14, 2022. And its NI 43-101 Technical Report for the Bigstone Deposit resource estimate on February 11, 2022. Investors are encouraged to consult the full text of these technical reports which may be found under Foran’s profile on www.sedarplus.ca.
For further information please contact:
Purepoint Uranium Group Inc.
Chris Frostad, President and CEO
(416) 603-8368
cfrostad@purepoint.ca
www.purepoint.ca
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Source: Purepoint Uranium Group Inc.
