Canada-based exploration and development company Vatic Ventures has entered into a share purchase agreement to acquire a 100% interest in private company Velvet Clean Energy, subject to approval from the TSX Venture Exchange (TSXV).
The private company holds rights to acquire up to an 80% interest in EPL 8289 (ZOYA property), and up to a 90% interest in EPL 8735 (GALORE property), both located in the uranium province of Erongo within the Alaskite Alley in Namibia.
The ZOYA property spans 44.62km² and the GALORE property 87.65km² within a jurisdiction known for significant uranium production. The properties are strategically located near the Husab and Rossing uranium mines, with access to infrastructure.
Vatic will issue 7.5 million post-consolidation common shares to Velvet shareholders at a deemed price of C$0.06 ($0.043) per share under the agreement.
For EPL 8289, Velvet can earn an initial 70% interest by making cash payments totalling $600,000 (£449.05m) and issuing shares valued at $400,000. The initial 70% interest vests with cash payments spread until 31 March 2027 and share issuances on specified dates in 2026 and 2027.
Velvet must also meet a minimum expenditure obligation of $3m over four years, or $1.5m over three years, to exercise the second option to acquire an additional 10% interest.
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By GlobalDataThe terms for EPL 8735 require cash payments of $200,000 and share issuances worth $150,000 to earn an 80% interest. An additional 10% can be acquired upon funding further exploration and a feasibility study, with the acquisition price contingent on the results.
Upon completion of the transaction, Velvet will become a wholly owned subsidiary of Vatic. The company also plans to change its name to Ballistic Energy Metals and consolidate its shares on a three-old-for-one-new basis.
Vatic CEO Loren Currie said: “These uranium exploration assets are contiguous and on strike with some of the largest uranium mines in the world, Husab the 3rd and Rossing the 7th largest uranium deposit worldwide, and it also helps to be situated in one of the top mining jurisdictions in Africa, with a tremendous record of uranium production.
“The gap between uranium supply and demand has been persisting on the market and is predicted to widen even more because of the degradation of the uranium supply industry over a decade of prolonged low prices and with many more governments turning to nuclear power for secure clean baseload power.
“We foresee huge challenges to meet new demand in the medium to long term, which will drive uranium prices up and render uranium resources such as those that we hope to discover on EPL 8289 and EPL 8735 significantly valuable.”
In December 2023, Vatic Ventures signed an agreement to acquire a 100% interest in private company 1432714 BC, which holds an option to acquire a Brazil-based lithium property, Solonópole South, from arms-length vendors.
