27th Nov 2018 11:47
LONDON (Alliance News) - Rose Petroleum PLC on Tuesday said a five-year database access deal has been agreed with enCore Energy Corp and announced it is in talks to sell its North Wash vanadium project in Utah.
Shares in the natural resources business were up 2.4% at 2.36 pence on Tuesday.
Rose's wholly owned subsidiary, Vane Minerals LLC, will provide exclusive access to its US uranium exploration project database for an initial term of five years.
This database consists of various kinds of data on the uranium breccia pipe district of northern Arizona, including aerial photography and drill results.
In return, enCore will issue 3.0 million of its own shares. These have an approximate value of USD300,000 and represent approximately 2.1% of enCore's existing share capital which Rose can dispose of after a four-month lock-up.
enCore will then, as its own expense, use the database to generate and develop prospects in Arizona.
Should any of these reach the development stage, enCore will grant "a one-off opportunity to participate in these projects", with Rose holding a maximum 25% interest in said projects at its own discretion.
The purchase price for this interest will equate to three and a half times the pro-rata exploration costs of advancing the project to development.
If Rose does acquire an equity interest in any of these projects, it will be responsible for development expenditure equal to its interest.
Furthermore, should Rose develop any of its eight breccia pipe uranium projects, enCore has the right to participate in these on the same terms.
Rose has excluded its North Wash vanadium/uranium project in Garfield County, Utah from the enCore deal as it is considering the sale of this project and third party discussions are already underway.
Rose said that back in 2012, when the pre-scoping study of North Wash took place, the project was determined to be uneconomic.
However, according to Rose, a rise in the price of vanadium to around USD29 per pound from roughly USD5 per pound in 2012 has "significantly improved" interest in North Wash.
Rose Chief Executive Matthew Idiens said: "I'm delighted that we have been able to complete this agreement with enCore, to utilise our extensive database, which not only provides the group with upfront consideration but which will also enable Rose to retain an interest in any projects that move forward to development should we wish to do so."
"The North Wash vanadium project offers significant potential value and we will continue to progress discussions with third parties to create value for shareholders," Idiens added.
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