Mineral exploration company sells stake in Nunavut in exchange for equity

A global uranium company has announced plans to sell a small stake in Nunavut to a Canadian mineral exploration firm in exchange for equity in the project.

IsoEnergy Ltd. announced Thursday in a news release it has agreed to sell its Mountain Lake property to Future Fuels Inc., formerly Saville Resources.

Future Fuels holds exploration rights to a site in Nunavut’s Hornby Basin surrounding the Mountain Lake property. The sale would consolidate the Hornby Project, which is located about 95 kilometres southwest of Kugluktuk, to an area of over 3,420 square kilometres.

The area was first explored intensively from 1977 to 1988. Exploration activity ramped up again between 2005 and 2011.

The transaction will give IsoEnergy a “significant equity position” in Future Fuels, states the release. The company will receive as much as 15 million common shares in Future Fuels Inc., or up to 19.9 per cent of the company’s outstanding common shares. Future Fuels also has an obligation to complete its own concurrent financing to complete the sale.

IsoEnergy will also have the right to appoint one representative to the Future Fuels board and receive net smelter returns royalties from any of the company’s uranium production in Nunavut.

IsoEnergy estimates the transaction will add approximately $4 million in value to its portfolio, which is now worth $32.2 million, the release states.

The transaction is subject to approval from the TSX Venture Exchange.