Tonogold Resources has signed a term sheet agreement to acquire a 100% stake in JAG Minerals, which fully owns JAG Minerals USA.

This move is set to bolster Tonogold’s portfolio with three significant uranium and vanadium projects in the west-central US.

The acquisition includes the Marysvale Project, SKY Project and 13 historic high-grade vanadium/uranium mines across Colorado and Utah.

Under the agreed terms, Tonogold will purchase the shares for a total of $6.5m, subject to a 90-day due diligence period.

The payment will be split between $4.5m in Tonogold shares, based on the volume-weighted average price prior to signing the Stock Purchase Agreement, and a further $2m in cash to JAG shareholders at settlement.

Tonogold also secured an exclusive 60-day period from the signing of the term sheet and has made a non-refundable payment of $60,000 to JAG Minerals.

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The Marysvale Project, adjacent to the Central Mining Area, has historical significance with an estimated 1.39 million pounds of triuranium octoxide (U308) produced between 1949 and 1966.

Located in Fremont Country, Wyoming, the SKY Project comprises 57 unpatented mining claims and two state leases.  

The Stateline property in the La Sal Creek mining district includes 86 unpatented mining claims. The region is known for past production of high-grade vanadium, with the land package encompassing 13 historic mines.

Tonogold CEO William Hunter said: “These properties have been subject to extensive exploration and mining so we know the uranium and vanadium are there and this will allow for a rapid restatement of the historic resources on the Sky and Marysvale properties.

“The next steps forward will be the review of the JAG Data Set, followed by Board approvals and a corporate restructuring. While this process is running, the JAG technical team will continue to complete their 2023 exploration programme and produce a 2024 exploration plan that will focus on developing higher-grade targets and bringing these resource calculations into an internationally accepted resource statement.”