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First Uranium Resources has signed a binding letter of intent (LOI) to acquire all of the shares of US-based Southwind Corporation.

Southwind is run by geologists and resource entrepreneurs Paul Barrett and Erika Syba. It owns a phosphate and heavy rare earths development project in the central US.

According to the LOI, First Uranium will have the option to pick a 100% stake in the US-based firm, by issuing up to 20 million of its shares.

Furthermore, First Uranium will incur at least $3m in work expenditures within the first year from the completion of the technical report.

Upon exercising the option, First Uranium will pay up to two million shares in finder’s fees.

Southwind CEO Paul Barrett said: “We are delighted to be partnering with First Uranium on this exciting project, with combined potential for two vital commodity streams – phosphates and rare earths. 

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“First Uranium’s participation will accelerate the development of this near-surface stratiform deposit, situated in the heart of the US Midwest, which has excellent potential to feed into the agricultural and high-tech metals sectors, both of which are experiencing sustained and long-term growth in feedstock demand.”

The company also unveiled private placement of up to $6m in subscription receipts.

Proceeds of the placement, which is planned to close on or about 31 March 2022, will be used for the firm to fund exploration and development work on its Arkansas project.