Rio Tinto Buys Pistol Bay’s Athabasca Basin Uranium Assets

Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) acquired Pistol Bay Mining’s (TSXV:PST) C block of uranium properties in a deal announced on Tuesday (February 13).

The C block of uranium properties, located in Saskatchewan’s Athabasca Basin, is under option to Rio Tinto, which has earned a 75-percent interest to date.

Under an amended agreement, Rio Tinto will acquire the final 25-percent stake in the properties by making a cash payment of $1 million to Pistol Bay within 14 days of the effective date of Tuesday’s agreement. As part of this agreement, no royalty will be granted to Pistol Bay with respect to the properties.

After Rio Tinto acquired the first 75-percent interest in Pistol Bay’s C block uranium properties, the company made plans to exercise its option to earn full interest by 2019. However, despite depressed uranium prices, the company made the decision to purchase the properties a year earlier.

Charles Desjardins, CEO of Pistol Bay, commented, “Rio Tinto’s payment does not dilute the Company and allows Pistol Bay to expand the scope of its upcoming exploration work, including drilling, on its Confederation Lake greenstone belt zinc–copper–gold project. We look forward to continuing our working relationship with Rio Tinto.”

Prior to its agreement with Pistol Bay, Rio Tinto completed the acquisition of Hathor Exploration, a Canadian uranium exploration company with assets in the Athabasca Basin, in January 2012.

Its assets gave the company access to a significant high-grade uranium deposit known as the Roughrider project, as well as further highly prospective exploration tenements in an area of Canada that currently supplies approximately 20 percent of global uranium.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.