Kraken Energy has reached a definitive option deal to purchase up to 75% of the Harts Point Uranium Property in Utah, US, from Atomic Minerals.

The agreement was announced earlier this month. As part of it, Kraken will operate the project and must incur a $1.5m expenditure within 18 months from the date of the options agreement to earn 65% interest.

It has the option to increase the stake to 75% by incurring an additional $2m within 30 months and issuing two million shares to Atomic.

Kraken will also grant a 2% net smelter royalty to Atomic, subject to a 1% buydown for $5m.

After the initial option is selected, Kraken will own 65%, and the remaining 35% will be owned by Atomic.

Once the extended option is opted, the ratio of ownership will be 75% and 25%, respectively, and a joint venture agreement will be formed.

Located in the Colorado Plateau, Harts Point is 64km north of the White Mesa Uranium Mill.

It is the only fully licensed and operating conventional uranium mill in the US.

There are 324 lode mining claims at the property, covering an area of 2,622 hectares, with drill permits for up to 25 exploration drill holes upon paying $58,000 to the US Bureau of Land Management.

Historically, the Colorado Plateau has produced more than 328 million pounds of natural uranium ore concentrate (U₃O₈) at 0.2–0.4% U₃O₈ since the 1950s.

Kraken stated that Harts Point is analogous to the Lisbon Valley where the Lisbon Valley Uranium District hosted 17 mines that produced nearly 80 million pounds of U₃O₈ at 0.34% U₃O₈ between 1948 and 1988.

The uranium deposits at the site range from 100m to 3,048m in length, 2m to 13m in thickness, and 31m to 427m in width.

The White Mesa uranium processing facility is located 64km from the site.

Kraken Energy CEO Matthew Schwab said: “Harts Point is perfectly situated for a discovery between previously producing operations to the east and west and has historic drilling that shows ‘off-scale’ radioactivity within the property.

“With the significant upside potential at Harts Point and drill permits in place, our team is now finalising the remaining details to begin drilling on the property as soon as possible.”