Forum Uranium Corp. (TSXV:FDC) has signed a definitive option agreement with Uracan Resources (TSXV:URC) further to its press release from July 8. Under the terms of the agreement, Uracan can earn up to a 70 percent interest in the Clearwater project, located in the Patterson Lake South Area of northern Saskatchewan.
As quoted in the press release:
In order for Uracan to earn a 51% interest in the property it must incur a total of $3.0 million in exploration expenditures over 3 years as follows:
Issue a total of 300,000 shares and 150,000 warrants of Uracan to Forum on signing a definitive agreement,, subject to regulatory approval. The warrants will be exercisable at a price of $0.15 per share for a term of 18 months.
- Commit exploration expenditures of $0.5 million in year one (firm commitment),
- Complete exploration expenditures of $1.0 million in year two, at which point Uracan will have earned a 25% interest,
- Complete exploration expenditures of $1.5 million in year three to earn a 51% interest.
Uracan can elect to earn an additional 19% interest in the Clearwater Project (total 70% interest) by making an additional $3 million in exploration expenditures within a two year period following the date it earns its 51% interest. Uracan will also grant Forum a 2% NSR Royalty on the property, with Uracan having the option to purchase 1% of the NSR for $1.0 million.
Uracan will fund all exploration work until the earn-in option has been completed, after which further work will be funded by the Joint Venture partners. Forum will be the Project operator until Uracan earns its 51% interest, after which Uracan may elect to become the operator.