Purepoint Uranium Enters into Option Agreement with Foran Mining Corporation for the Denare West Project
Purepoint Uranium Enters into Option
Agreement with Foran Mining Corporation for
the Denare West Project
Toronto, Ontario--(Newsfile Corp. - November 20, 2023) -
Purepoint Uranium Group Inc. (TSXV: PTU)
(OTCQB: PTUUF) (the "
Company
" or "
Purepoint
") today announced that it has entered into an option
agreement (the "
Option Agreement
") with a wholly-owned subsidiary of Foran Mining Corporation
(TSX: FOM) ("
Foran"
) pursuant to which Purepoint granted options to Foran to acquire up to 100%
interest in Purepoint's Denare West Project located in east-central Saskatchewan, approximately 55
kilometres west-southwest of Flin Flon, Manitoba (the "
Property
"). The Property is adjacent to and on
trend with Foran's McIlvenna Bay project.
Concurrently with the execution of the Option Agreement, Foran has agreed to invest $350,000 in a non-
brokered private placement of 7,000,000 common share units (each, a "
Unit
") of Purepoint at a price of
$0.05 per Unit (the "
Private Placement
"). Each Unit is comprised of one common share of Purepoint
and one common share purchase warrant exercisable at a price of $0.07 per share for a term of two
years from the date of issue. The closing of the Private Placement is subject to approval by the TSXV.
Purepoint intends to use the net proceeds of the Private Placement for general working capital
purposes.
"We are excited to contribute to the Foran narrative, particularly their development of the region's largest
undeveloped VHMS deposit. We look forward to the work they will be carrying out on the Denare West
property and its potential to add value to this already significant mining project." said Chris Frostad,
President & CEO of Purepoint. "We also appreciate Foran's investment in the equity of our company as
part of this transaction and mutual exposure to our respective efforts here in Saskatchewan."
Pursuant to the Option Agreement,
Foran has been granted the option (the "
First Earn-in Option
") to acquire a 51% beneficial
interest in the Property by incurring a total of $3,000,000 in qualifying exploration expenditures
("
Expenditures
") on the Property over a period of up to four years from the effective date of the
Option Agreement (the "
First Expenditure Period
").
Following the exercise of the First Earn-in Option, Foran will have the option (the
"Second Earn-
in Option
") to acquire an additional 29% beneficial interest in the Property by incurring an
additional $3,000,000 in Expenditures on the Property over a period of up to two years following
the end of the First Expenditure Period.
Following the exercise of the Second Earn-in Option, Foran will have the final option to acquire the
remaining 20% interest in the Property by making a payment in the amount of $10,000,000 (the
"
Final Purchase Option Price
") to Purepoint and granting a 2% net smelter returns royalty
("
NSR
") to Purepoint.
Foran has a multi-stage option to buy back the NSR royalty from Purepoint: initially, it can
repurchase 1% NSR for $1,000,000 (the "
First Royalty Option
") at any time before deciding to
operate a mine commercially on the Property. Following this, subject to exercising the First Royalty
Option and after 60 months of NSR payments, it has the option (the "
Second Royalty Option
") to
buy an additional 0.5% NSR for another $1,000,000. Finally, after 120 months of NSR payments
and exercising the Second Royalty Option, it can acquire the remaining 0.5% NSR for $1,000,000
(the "
Final Royalty Option Price
").
Subject to the stock exchange approval and satisfaction of certain other conditions set out in the
Option Agreement, Foran may pay the Final Purchase Option Price, the First Royalty Option Price,
the Second Royalty Option Price and the Final Royalty Option Price by issuing common shares
("
Foran Shares
") to Purepoint at a deemed price per share that is equal to the 20-trading day
volume weighted average price of Foran Shares immediately preceding the date of the notice of
exercise of the applicable option.
At the end of the earn-in phases, if Foran does not elect to acquire Purepoint's remaining interest
in the Property, Foran and Purepoint will form a joint venture (the "
Joint Venture
") whereby Foran
will fund all operations of the Joint Venture until it completes a pre-feasibility study with respect to
the Property.
Figure 1:
Denare West Project Location
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/3218/188074_6483b15764b49bbc_001full.jpg
Figure 2:
Compilation Map of Denare West Project showing 2022 Vertical Gravity Results
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/3218/188074_6483b15764b49bbc_002full.jpg
The transactions contemplated in the Option Agreement constitute a "Reviewable Transaction" under the
policies of the TSXV and remain subject to approval by the TSXV. The Option Agreement shall become
effective upon closing of the Private Placement and receipt of all requisite approvals from the TSXV.
About Purepoint
Purepoint Uranium Group Inc. (TSXV: PTU) (OTCQB: PTUUF) actively operates a uranium exploration
pipeline of nine advanced projects in Canada's Athabasca Basin. In addition to its flagship joint venture
project at Hook Lake with partners Cameco and Orano and a second joint venture with Cameco at
Smart Lake, Purepoint also holds seven 100% owned projects with proven uranium rich targets. With an
aggressive exploration program underway on multiple projects, Purepoint is emerging as the preeminent
uranium explorer in the world's richest uranium district.
About Foran Mining
Foran Mining is a copper-zinc-gold-silver exploration and development company, committed to
supporting a greener future, empowering communities and creating circular economies which create
value for all its stakeholders, while also safeguarding the environment. The McIlvenna Bay Project is
located entirely within the documented traditional territory of the Peter Ballantyne Cree Nation. Foran
Mining also owns the Bigstone Project, a resource-development stage deposit located 25km southwest
of its McIlvenna Bay project.
McIlvenna Bay is a copper-zinc-gold-silver rich VHMS deposit intended to be the centre of a new mining
camp in a prolific district that has already been producing for 100 years. McIlvenna Bay sits just 65km
West of Flin Flon, Manitoba and is part of the world class Flin Flon Greenstone Belt that extends from
Snow Lake, Manitoba, through Flin Flon to Foran Mining's ground in eastern Saskatchewan, a distance
of over 225km.
McIlvenna Bay is the largest undeveloped VHMS deposit in the region. Foran Mining announced the
results from its feasibility study on February 28, 2022, outlining that current mineral reserves would
potentially support an 18-year mine life producing an average of 65 million pounds of copper equivalent
annually. Foran Mining filed a NI 43-101 Technical Report for the McIlvenna Bay Feasibility Study on
April 14, 2022. And its NI 43-101 Technical Report for the Bigstone Deposit resource estimate on
February 11, 2022. Investors are encouraged to consult the full text of these technical reports which may
be found under Foran's profile on
www.sedarplus.ca
.
For further information please contact:
Purepoint Uranium Group Inc.
Chris Frostad, President and CEO
(416) 603-8368
www.purepoint.ca
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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