MKY Resources has entered into an agreement to purchase unlisted explorer Callabonna Uranium, creating a uranium-focused exploration company with a portfolio of properties across Australia.

As a combined entity, the new company will have sites in South Australia, the Northern Territory and Queensland.

Under the deal, MKY will issue 477 million shares in exchange for 39.5 million current issued shares in Callabonna Uranium.

Callabonna investor SK Energy has agreed to provide an additional $2m capital, MKY said in its ASX announcement.

MKY managing director Stephen McCaughey said the deal provides the company with ready-to-drill sandstone uranium targets in the Frome Embayment area, one of the most mineralised uranium terrains in Australia.

“The strong portfolio of projects with the additional A$2m capital provided by SK Energy and their welcomed support and involvement going forward, all position the revitalised company extremely well for exploration success in one of Australia’s premier uranium provinces,” McCaughey said.