Standard Uranium has reached a definitive option agreement with ATCO Mining, granting ATCO the option to acquire a 75% interest in the Atlantic Project in the eastern Athabasca Basin, Canada.

Under the agreed terms, ATCO can exercise the option by making cash payments, issuing shares to Standard Uranium and incurring exploration expenditures over a three-year period.

Standard Uranium chairman and CEO Jon Bey said: “The company is pleased to welcome the ATCO Mining team to the Athabasca Basin, Saskatchewan. We are excited to confirm the Atlantic project will have three partner-funded years of exploration run by our technical team.

“The Atlantic project has exceptional potential for a high-grade unconformity-related uranium discovery, and we are looking forward to kicking off the 2024 exploration season with the Atlantic drill programme, beginning in the immediate future.”

Once ATCO fulfils the option requirements, the companies plan to establish a joint venture to further develop the Atlantic Project.

Until the option is exercised, Standard Uranium will operate the project, with entitlement to a fee on expenditures, starting at 10% in the first year and increasing to 12% in the subsequent two years.

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Following the option exercise, Standard Uranium will maintain a 2.5% net smelter returns royalty on the project.

Notably, ATCO has the right to buy back 1% of this royalty for a one-time cash payment of $1m (C$1.35m).

The Atlantic Project is situated in the Mudjatik geological domain, and spans 6.5km of an 18km-long conductive exploration trend, which is home to numerous uranium occurrences.

Standard Uranium president and exploration vice-president Sean Hillacre said: “Our technical team and new partners at ATCO are excited to begin drilling the Atlantic project imminently, exploring for high-grade unconformity-related uranium mineralisation.

“Our exploration thesis and targeting strategy in this booming district has been reinforced by high-quality geophysical interpretations, and all key vendors and personnel are in place to test our first batch of targets this winter.”