VANCOUVER, Sept. 5, 2018 /CNW/ - Uracan Resources Ltd. (TSX.V:URC) ("Uracan" or "the Company") is pleased to announce that the Company has entered into a definitive agreement (the "Agreement") whereby the Company has the right to earn up to a 100% interest in the Huzyk Creek Vanadium Property (the "Property"), in north-central Manitoba.
The Huzyk Creek Vanadium Property is located approximately 75 kilometres southeast of the town of Snow Lake, Manitoba and consists of a Mineral Exploration License ("MEL") covering approximately 216 square kilometres. This area has seen significant exploration for base metal mineralization as it lies within the projected extension of both the Flin Flon/Snow Lake belt as well as the Thompson Nickel Belt. Historically the region has seen no exploration for Vanadium.
A historic drill core resampling program by the property vendors (the "Vendors") has discovered a broad zone of vanadium mineralization. Resampling of a 1997 drill hole (NIM-19) returned a total of 68 meters @ 0.14% V2O5 hosted within a sequence of meta-sediments associated with sulphides. Individual V2O5 values up to 0.6% over 0.6 meters were noted within this mineralized interval. Significantly, mineralization is open down hole, with the drill hole ending in a sequence of meta-sediments with elevated V2O5 values. No other known historic drill holes have been completed on this mineralized zone. At this time the strike, dip and lateral extent of mineralization is not known.
The mineralized interval is associated with a 1.5 kilometer long ground electromagnetic induction (EM) geophysical anomaly. This ground EM anomaly is associated with a longer, multi-kilometre airborne geophysical anomaly. This geophysical work was completed by previous exploration companies in the region, and the geophysical data was submitted for assessment work at the Manitoba Mining Recorders office.
A review of assessment file data by Uracan geologists has outlined additional widespread vanadium anomalies in historic drilling throughout the property. Individual values up to 0.20% V2O5 have been reported as part of limited geochemical sampling in drill core. Widespread meta-sedimentary intervals with elevated sulphide content are also commonly noted in historic drill logs. Uracan is planning to locate any extant historic drill core for further sampling and review.
Vanadium has historically been used in the steel industry, however demand for specialty battery metals has become an increasingly important driver for vanadium. Efficient battery and grid energy storage plays a key role in moving to more renewable energy sources, which will drive the demand for vanadium. The majority of the supply for vanadium comes from Africa, China, Brazil and Australia, with no current North American production.
Uracan can earn an initial 49% interest in the property by making staged payments over 3 years to the property vendors totalling $215,000 ($25,000 upon signing), issuing $180,000 of Uracan shares and completing $2,500,000 of exploration on the property. The payments are as follows:
- $25,000 in cash and 1,000,000 common shares upon approval by the TSX Venture Exchange
- $50,000 in cash, $50,000 in shares, and $250,000 in exploration expenditures by the first anniversary date of the agreement
- $60,000 in cash, $50,000 in shares and $750,000 in exploration expenditures by the second anniversary date of the agreement
- $80,000 in cash, $50,000 in shares and $1,500,000 in exploration expenditures by the third anniversary date of the agreement
The Company can earn an additional 21% interest with a cash payment of $125,000 and the issuance of $50,000 of Uracan common shares to the vendors, along with completing $2,225,000 of exploration on the property which will include a preliminary economic assessment (PEA) study.
Uracan can earn the remaining 30% interest in the property for a total 100% interest in the Huzyk Creek Project by completing a Pre-Feasibility study within 24 months of the 4th anniversary of the agreement, along with a payment of $500,000 to the property vendors.
The vendors will retain a 2% Net Smelter Return royalty (NSR) on the Huzyk Creek Property. Uracan shall have the option to repurchase 1% of this NSR any time for $1,000,000 in cash or shares. Uracan will also have a right of first refusal on the remaining 1% NSR if the vendors elect to sell this interest.
Marc Simpson, P.Geo., Uracan's President and CEO is the Qualified Person that has reviewed and approved the contents of this news release on behalf of Uracan.
In addition to the exploration property optioned from the Vendors, Uracan has added additional prospective ground adjacent to the MEL discussed above. An additional 231 square kilometres has been staked for an overall total property position of approximately 447 square kilometres.
Historic exploration drilling for base metal mineralization encountered significant intervals of meta-sediments along with historic selective drill hole geochemical results with elevated vanadium values up to 0.20%. These results show that good potential exists for vanadium mineralization within the area covered by the overall property.
Name Change and Share Consolidation
In conjunction with the Agreement, the Board of Directors of the Company has approved a name change to "Vanadian Energy Corporation" and a consolidation of its issued and outstanding share capital on the basis of one new common share for four outstanding common shares, subject to TSX Venture Exchange approval. As a result, the outstanding common shares of the Company will be reduced to approximately 26,486,150, subject to adjustment for fractional shares. The Consolidation will also apply to Common Shares issuable upon the exercise of the Company's outstanding stock options.
This name change better reflects the Company's focus on the broader energy sector, both in the battery metal space as well as the Company's existing uranium exploration assets.
Marc Simpson, President & CEO of Uracan stated, "We view the energy metal sector as one of the most compelling opportunities in the mining industry today. Uracan has acquired an excellent early stage vanadium asset in a mining friendly jurisdiction. Vanadium is in demand both by the steel industry and the nascent vanadium redox battery storage industry. The vanadium market has tremendous growth potential in the future to supply these markets. Uracan will continue to evaluate other opportunities to add to its portfolio."
ABOUT URACAN RESOURCES LTD.
Uracan Resources Ltd. (TSX.V:URC) is a Canadian-based exploration company focused on exploring for vanadium deposits in Manitoba, as well as uranium deposits in Saskatchewan, Canada. In August 2018, Uracan signed an agreement whereby Uracan can acquire up to a 100% interest in the Huzyk Creek Vanadium Property. Uracan also holds interests in a number of uranium exploration properties in Saskatchewan. Uracan continues to review additional opportunities worldwide to capitalize on management's exploration and financing capabilities.
ON BEHALF OF URACAN RESOURCES LTD.
President and CEO
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The foregoing information may contain forward-looking information relating to the future performance of the Company. Forward looking information is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Such risks and other factors include, among others, the actual results of exploration activities, changes in world commodity markets or equity markets, the risks of the mining industry including, without limitation, those associated with the environment, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, title disputes, change in government and changes to regulations affecting the mining industry, and other risks and uncertainties detailed from time to time in the Company's filings with the Canadian securities administrators (available at www.SEDAR.com ). Forward-looking statements are made based on various assumptions and on management's beliefs, estimates and opinions on the date the statements are made. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking information contained herein. The Company undertakes no obligation to update forward-looking statements if these assumptions, beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
SOURCE Uracan Resources Ltd.
For further information: Marc Simpson, President and CEO, Uracan Resources Ltd., 604-506-6996, www.uracan.ca