• Joint effort to advance rock phosphate projects in the
Northern Uranium Limited (ASX: NTU) is pleased to advise its has entered into a non-binding Heads of Agreement (“HOA”) with Korean based fertiliser exploration and trading company FSL Resources Limited (“FSL”) to combine and advance their rock phosphate projects.
Under the agreement, the two companies will combine their respective phosphate interests into a single and dedicated corporate vehicle, with more than 38,000km2 of prospective phosphate licences in the
The combination will create a new major player in rock phosphate in
FSL established an Australian subsidiary FSL World Holdings Pty Ltd (“FSLWH”) in 2005 to identify prospective rock phosphate exploration and development opportunities in the
The areas were selected on the basis of historical rock phosphate exploration results and a more recent Northern Territory Geological Survey compilation of data from numerous water bores identifying areas with enriched phosphatic sedimentary units. The most advanced of FSLWH’s projects is the Barkly Project comprising two granted exploration licences approximately in the centre of the
Northern Uranium began acquiring tenements for phosphate exploration in the
Under the terms of the HOA Northern Uranium will, subject to due diligence, vend into FSLWH its phosphate rock tenement and intellectual property interests in return for shares. Upon completion, Northern Uranium will hold approximately 30% of the issued capital of FSLWH and two directors from Northern Uranium will be appointed to FSLWH’s Board. Following due diligence a binding agreement is expected to be finalised by the end of the December quarter.
If the transaction proceeds, Northern Uranium will contribute $65,000 of seed capital to FSLWH, and current FSLWH shareholders will co-invest $65,000 for working capital and for a small drilling program on the highly prospective Barkly tenements. FSLWH will then raise additional funds independent of Northern Uranium which will focus on its uranium exploration activities.
Commenting on the proposed business combination Northern Uranium’s Executive Chairman Mr Kevin Schultz said:
“FSLWH through its Board of Directors brings experience and strong relationships in the fertiliser industry to the proposed business combination and Northern Uranium sees this transaction as an excellent way for our Company to derive value from non-core phosphate exploration tenements.
“We look forward to working with FSLWH’s Board and Management to create a new force in rock phosphate exploration and development,” Mr Schultz said. “Northern Uranium remains committed to uranium exploration with our key focus being the Gardiner-Tanami Project, and the proposed phosphate transaction reinforces that strategy.”
Northern Uranium Limited is primarily a uranium exploration and development company and holds large and prospective projects in
The Company has a strategic alliance with the French nuclear group,
Northern Uranium recently completed a share right issue to raise approximately $2.2 million to fund ongoing exploration at the Gardiner-Tanami project.