Cosa Resources Completes Agreement to Form Joint Ventures with Denison Mines on Multiple Uranium Projects
Cosa Resources Completes Agreement to
Form Joint Ventures with Denison Mines on
Multiple Uranium Projects
Highlights
Cosa has acquired a 70% interest in, and will operate, multiple prospective uranium
projects in the infrastructure rich Eastern Athabasca Basin
Cosa anticipates the commencement of diamond drilling in the coming weeks at the
Murphy Lake North Project, located within 4 km of the Hurricane Deposit
Geoff Smith, Denison's VP Corporate Development and Commercial, joins Cosa's Board
of Directors
Chad Sorba, Denison's VP Technical Services and Project Evaluation; a critical member
of the Denison team which discovered both the Phoenix and Gryphon uranium deposits,
joins Cosa as Technical Advisor
Denison is now Cosa's largest shareholder at 19.95% ownership and is committed to a
minimum of C$1,000,000 participation in future equity financings
Vancouver, British Columbia--(Newsfile Corp. - January 14, 2025) -
Cosa Resources Corp.
(
TSXV:
COSA
) (
OTCQB:
COSAF
) (
FSE: SSKU
) ("
Cosa
" or the "
Company
") is pleased to announce that it
has completed its previously announced acquisition (the "
Transaction
") from Denison Mines Corp.
("
Denison
") (
TSX: DML
) (
NYSE American: DNN
) of a 70% interest in a portfolio of prospective
uranium projects (the "
Projects
").
Keith Bodnarchuk, Cosa President and CEO, commented:
"We are thrilled to have completed this
transaction and are eager to continue our exploration efforts with our new joint venture partner and
largest strategic shareholder Denison Mines. With a growing portfolio of highly prospective and drill-
ready projects in the Eastern Athabasca Basin paired with strong corporate, technical, and financial
support from Denison, there has never been a more exciting time for Cosa and our shareholders.
Cosa welcomes Geoff Smith to our Board of Directors, with his extensive experience in capital
markets, finance, and the mining sector as a whole. Additionally, we welcome Chad Sorba as a
Technical Advisor. Among his various accomplishments, Mr. Sorba is an instrumental member of the
Denison team which discovered and is developing Denison's Phoenix and Gryphon uranium deposits
at its Wheeler River project.
We thank the team at Denison for working to complete this transaction in
a timely manner, allowing us to prepare for a highly anticipated and fully funded winter drilling
campaign at the Murphy Lake North project. We encourage our shareholders to stay tuned as we
finalize our upcoming exploration plans and prepare for what is sure to be an exciting year for Cosa."
Additions to the Cosa Team
The following appointments have been made in connection with the Transaction:
Geoff Smith, Director
Mr. Smith brings to Cosa extensive experience in capital markets and the mining and resource sector.
Mr. Smith currently serves as the VP of Corporate Development and Commercial for Denison focusing
on investor and customer engagement, the evaluation and execution of growth opportunities and
financing arrangements, and the development and oversight of the Company's uranium sales and
contracting strategies. Mr. Smith previously served as Managing Director in the Global Mining & Metals
group at Scotiabank. Mr. Smith holds an Honours Bachelor of Commerce from Queen's University and is
a CFA Charterholder. Mr. Smith also serves as a Director of EMX Royalty Corporation (TSXV: EMX)
(NYSE American: EMX).
Chad Sorba, Technical Advisor
Mr. Sorba is a Professional Geoscientist with almost two decades of experience in Canadian and
international uranium exploration, evaluation, and development. As a Project Geologist for Denison
Mines, Mr. Sorba was a project lead and critical team member for the discovery of Denison's Gryphon
and Phoenix uranium deposits at their flagship Wheeler River project. Appointed as Vice President
Technical Services & Project Evaluation in 2024, Mr. Sorba leads the Denison team that is pioneering
the use of the In-Situ Recovery ("ISR") mining method for extraction of high-grade unconformity style
uranium deposits in the Athabasca Basin. Mr. Sorba has previously worked alongside several of Cosa's
team members, including Chairman Steve Blower and President and CEO Keith Bodnarchuk, and is
expected to bring a wealth of experience in uranium exploration and development to Cosa's award-
winning technical team.
Transaction
The Transaction was completed pursuant to the terms of an acquisition agreement dated November 26,
2024 (the "
Acquisition Agreement
") between the Company and Denison.
The Projects consist of (a) the Murphy Lake North Project, located within four kilometres of IsoEnergy's
Hurricane Deposit, (b) the Darby Project, located ten kilometres west of Cameco's Cigar Lake Mine,
and (c) the Packrat Project, located 19 kilometres southwest of the Rabbit Lake Mill.
Under the terms of the Acquisition Agreement, Cosa has acquired a 70% interest in each of the Projects
from Denison. Cosa and Denison have entered into a joint venture on each of the Projects (each, a
"
Joint Venture
") with Cosa as operator of all Projects. In addition, Denison has agreed to participate in
subsequent equity financings of Cosa for aggregate total proceeds of a minimum of C$1,000,000, the
timing and amount to be at Cosa's discretion.
As consideration for the Transaction, Cosa issued to Denison 14,195,506 common shares (the
"
Consideration Shares
") at a deemed price of $0.225 per share, equivalent to 19.95% of the
outstanding common shares of Cosa as of the closing date (the "
Closing Date
").
Additionally, Cosa will be required to:
Issue Denison a further C$2,250,000 in deferred consideration shares (the "
Deferred
Consideration Shares
") within five years of the Closing Date. The Deferred Consideration
Shares will be issuable every six months after the Closing Date at the price which is equal to the
volume weighted average price of the Company's common shares for the five-trading day period
prior to the issuance date (provided that any further issuance to Denison of Cosa common shares
will not result in Denison's ownership exceeding 19.95% of Cosa's issued and outstanding
shares). Notwithstanding the foregoing, if required by the TSX Venture Exchange (the "
TSXV
"), the
Deferred Consideration Shares will be issued at a floor price of $0.17;
Pay Denison the remainder of the value of the Deferred Consideration Shares in cash should the
Company fail, or otherwise be unable, to issue the full value of the Deferred Consideration Shares
within the required timeline;
Fund 100% of the first C$1,500,000 in exploration expenditures on the Murphy Lake North Project
by December 31, 2027. Failure to do so will result in Denison's ownership in the Murphy Lake
North Project increasing to 51% and Denison assuming operatorship;
Post a deficiency deposit in the amount of up to C$35,000 to maintain the Murphy Lake North
mineral claims and, if required, reimburse Denison for any deficiency deposit posted or for
expenses incurred towards exploration at Murphy Lake North up to a maximum of C$150,000;
Fund 100% of the first C$5,000,000 in exploration expenditures on the Darby Project by June 30,
2029. Failure to do so will result in Denison's ownership in the Darby Project increasing to 51%
and Denison will assume operatorship; and
Appoint a technical advisor nominated by Denison for a period of five years from the Closing Date
or until all of Cosa's obligations under the Acquisition Agreement have been fulfilled.
The Darby Project is subject to a buydown (the "
Buydown
") which permits Denison to reclaim up to
60% of the Darby Project and is to be the greater of: (i) C$50,000,000 or (ii) 450% of Cosa's exploration
expenditures to date (excluding the initial C$5,000,000 in Cosa funded expenditures) incurred on the
Darby claim(s) for the proportion of the property interest subject to the Buydown. The Buydown can be
completed through a combination of cash payments and Denison sole-funded project expenditures, and
must be a minimum of 25% cash. The Buydown will be extinguished if Denison's interest in the Darby
Project claims subject to the Buydown fall below 10%, or upon commercial production of 500,000 lbs of
U
3
O
8
from the claims subject to the Buydown.
The Consideration Shares are subject to a statutory hold period of four months and one day from the
Closing Date. The Deferred Consideration Shares will be subject to a statutory hold period of four
months and one day from the date of issuance thereof.
The Transaction is an Arm's Length Transaction under the policies of the TSXV.
Ancillary Agreements
In connection with closing of the Transaction, Cosa and Denison have entered into a royalty agreement
for each Project (the "
Royalty Agreements
"), an investor rights agreement (the "
Investor Rights
Agreement
"), and a joint venture agreement for each Project (the "
Joint Venture Agreements
").
The Royalty Agreements provide Denison with a 2% Net Smelter Royalty ("
NSR
") on the Darby and
Packrat Projects, and a 0.5% NSR on the Murphy Lake North Project. Cosa retains the right to
repurchase 50% of the royalties on the Darby Project and the Packrat Project in exchange for a cash
payment of C$2,000,000 per project.
The Investor Rights Agreement provides, among other things, that for so long as Denison holds at least
5% of the issued and outstanding Common Shares, it will have a pre-emptive right and top-up rights
entitling it to maintain and/or otherwise acquire up to a 19.95% interest in Cosa. Additionally, Denison
may nominate one director to Cosa's board of directors for so long as Denison holds at least 5% of the
issued and outstanding Common Shares and an additional director to Cosa's board of directors for so
long as Denison holds at least 10% of the issued and outstanding Common Shares.
Pursuant to the Joint Venture Agreements, the parties have formed Joint Ventures in which Cosa owns a
70% interest and Denison owns a 30% interest in each Project. Cosa will be the operator for all Projects
and is entitled to charge an industry standard operator fee to the Joint Venture.
The Projects
Murphy Lake North
Murphy Lake North covers a portion of the Larocque Lake trend and is located 3.2 kilometres east of the
Hurricane deposit (Figure 2). The Hurricane deposit is the world's highest-grade Indicated mineral
resource for uranium and was discovered and delineated for IsoEnergy Ltd. by current members of
Cosa's management, board of directors, and advisors from 2018 through 2022. The Larocque Lake
trend also hosts the Larocque Lake zone, the Yelka Prospect, and the Alligator Lake zone. Murphy Lake
North contains approximately six kilometres of conductive strike length oriented sub-parallel to
conductive features associated with the Hurricane Deposit. Limited historical drilling completed on
Murphy Lake North intersected weak mineralization in the basement and zones of alteration and
structure in the sandstone and basement. Historical drilling, completed prior to the discovery of
Hurricane, focused on the western extremity of the property and left most of the conductive strike length
untested. Abundant drill targets exist at Murphy Lake North and diamond drilling is planned for Q1 of
2025.
The depth to the unconformity at Murphy Lake North is approximately 250 metres.
The Darby Project
The Darby Project is located ten kilometres west of the Cigar Lake Mine and 17 kilometres north of the
McArthur River Mine (Figure 3). Darby is interpreted to contain more than 25 kilometres of conductive
strike length, including the 8-kilometre-long 95B trend oriented parallel to the Cigar Lake - Tucker Lake
trend. Historical drilling on 95B defined more than 25 metres of unconformity offset where a package of
metasedimentary rocks hosting graphitic brittle structure, hydrothermal alteration, and weak uranium
mineralization lies in fault contact with underlying granitic rocks. Only one drill hole completed along
strike is interpreted to have intersected the optimal target in this prospective geological setting. Weak
uranium mineralization has also been intersected in the northeast portion of Darby proximal to the Cigar
Lake - Tucker Lake trend, and along the northern extension of the 4A trend north of Darby. Initial work will
include diamond drilling to follow-up historical drilling results and geophysical surveying to refine
conductive drill targets.
The depth to the unconformity at Darby is between 480 and 650 metres.
The Packrat Project
The Packrat Project is located 28 kilometres east of the Cigar Lake Mine and 19 kilometres southwest
of the Rabbit Lake Mill (Figure 4). Packrat covers a prominent magnetic break and basement-hosted
resistivity low trend. Limited historical drilling on Packrat targeting the resistivity low trend and magnetic
break intersected weak uranium mineralization and zones of structural disruption and alteration of
basement rocks. Initial work at Packrat will include the compilation and reinterpretation of historical
geophysical and drilling data.
The depth to the unconformity at Packrat is less than 100 metres.
Figure 1 - Cosa's Eastern Athabasca Uranium Projects with Joint Venture Projects
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/9865/237128_d80354f2b4114a4f_003full.jpg
Figure 2 - The Murphy Lake North Uranium Project
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/9865/237128_d80354f2b4114a4f_004full.jpg
Figure 3 - The Darby Uranium Project
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/9865/237128_d80354f2b4114a4f_005full.jpg
Figure 4 - The Packrat Uranium Project
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/9865/237128_d80354f2b4114a4f_006full.jpg
About Denison Mines
Denison is a leading uranium exploration and development company with interests focused in the
Athabasca Basin region of northern Saskatchewan, Canada. Denison has an effective 95% interest in
its flagship Wheeler River Uranium Project, which is the largest undeveloped uranium project in the
infrastructure rich eastern portion of the Athabasca Basin region of northern Saskatchewan. In mid-2023,
the Phoenix feasibility study was completed for the Phoenix deposit as an ISR mining operation, and an
update to the previously prepared 2018 Pre-Feasibility Study
was completed for Wheeler River's
Gryphon deposit as a conventional underground mining operation. Based on the respective studies, both
deposits have the potential to be competitive with the lowest cost uranium mining operations in the
world. Permitting efforts for the planned Phoenix ISR operation commenced in 2019 and several notable
milestones were achieved in 2024 with the submission of federal licensing documents and the
acceptance of the final form of the project's Environmental Impact Statement by the Province of
Saskatchewan and the Canadian Nuclear Safety Commission .
Denison's interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake Joint
Venture ('MLJV'), which includes unmined uranium deposits (planned for extraction via the MLJV's
SABRE mining method starting in 2025) and the McClean Lake uranium mill (currently utilizing a portion
of its licensed capacity to process the ore from the Cigar Lake mine under a toll milling agreement), plus
a 25.17% interest in the Midwest Joint Venture ('MWJV')'s Midwest Main and Midwest A deposits, and a
69.44% interest in the Tthe Heldeth Túé ('THT') and Huskie deposits on the Waterbury Lake Property
('Waterbury'). The Midwest Main, Midwest A, THT and Huskie deposits are located within 20 kilometres
of the McClean Lake mill. Taken together, Denison has direct ownership interests in properties covering
~384,000 hectares in the Athabasca Basin region.
Additionally, through its 50% ownership of JCU (Canada) Exploration Company, Limited ('JCU'),
Denison holds interests in various uranium project joint ventures in Canada, including the Millennium
project (JCU, 30.099%), the Kiggavik project (JCU, 33.8118%) and Christie Lake (JCU, 34.4508%).
In 2024, Denison celebrated its 70th year in uranium mining, exploration, and development, which began
in 1954 with Denison's first acquisition of mining claims in the Elliot Lake region of northern Ontario.
Denison has a market capitalization of approximately ~$2.5 billion (~US$1.7 billion) and its common
shares are listed on the Toronto Stock Exchange (the 'TSX') under the symbol 'DML' and on the NYSE
American exchange under the symbol 'DNN'. As at September 30, 2024 Denison's financial position
includes over $105,000,000 in cash and cash equivalents and over $240,000,000 in uranium
investments (Denison MD&A dated 30 September 2024).
Denison will be filing an early warning report, under National Instrument 62-103, in respect of the
acquisition by Denison of the 14,195,506 Consideration Shares on closing of the Transaction.
Prior to
the issuance of the Consideration Shares by Cosa, Denison held no common shares of Cosa.
Immediately after giving effect to the issuance of the Consideration Shares, Denison had beneficial
ownership of, or control and direction over, 14,195,506 Consideration Shares representing
approximately 19.95% of the issued and outstanding common shares of Cosa as of the date hereof.
The
Consideration Shares were acquired by Denison for investment purposes. Denison intends to review, on
a continuous basis, various factors related to its investment in Cosa, and may decide to acquire or
dispose of additional securities of Cosa as future circumstances may dictate, including pursuant to the
terms of the Acquisition Agreement and/or its pre-emptive rights under the Investor Rights Agreement.
Further information regarding the Transaction is available in the Early Warning Report filed under Cosa's
profile on SEDAR+ at
www.sedarplus.ca
or by contacting Denison:
Geoff Smith, Vice President Corporate Development & Commercial
Denison at 1100 - 40 University, Toronto, Ontario M5J 1T1
About Cosa Resources Corp.
Cosa Resources is a Canadian uranium exploration company operating in northern Saskatchewan. The
portfolio comprises roughly 237,000 ha across multiple 100% owned and Cosa operated Joint Venture
projects in the Athabasca Basin region, all of which are underexplored, and the majority reside within or
adjacent to established uranium corridors.
Cosa's award-winning management team has a long track record of success in Saskatchewan. In 2022,
members of the Cosa team were awarded the AME Colin Spence Award for their previous involvement
in discovering IsoEnergy's Hurricane deposit. Prior to Hurricane, Cosa personnel led teams or had
integral roles in the discovery of Denison's Gryphon deposit and 92 Energy's Gemini Zone and held key
roles in the founding of both NexGen and IsoEnergy.
Cosa's primary focus through 2024 was initial drilling at the 100% owned Ursa Project, which captures
over 60-kilometres of strike length of the Cable Bay Shear Zone, a regional structural corridor with known
mineralization and limited historical drilling. It potentially represents the last remaining eastern
Athabasca corridor to not yet yield a major discovery, which the Company believes is primarily due to a
lack of modern exploration. Modern geophysics completed by Cosa in 2023 identified multiple high-
priority target areas characterized by conductive basement stratigraphy beneath or adjacent to broad
zones of inferred sandstone alteration - a setting that is typical of most eastern Athabasca uranium
deposits. Guided by a recently completed Ambient Noise Tomography (ANT) survey, Cosa's second
and most recent drilling campaign at Ursa intersected a significant zone of unconformity-style sandstone
hosted structure and alteration underlain by several intervals of anomalous radioactivity in the basement
rocks.
In January of 2025, the Company entered a transformative strategic collaboration with Denison Mines
involving the acquisition of a 70% interest in and the formation of multiple joint ventures for highly
prospective eastern Athabasca uranium exploration projects.
Denison is Cosa's largest shareholder and
gains exposure to Cosa's potential for exploration success and its pipeline of uranium deposits.