VANCOUVER — Macusani Yellowcake (TSXV: YEL, US-OTC: MCYWF) has struck a deal to buy Azincourt Uranium’s (TSXV: AAZ, US-OTC: AZURF) Minergia uranium portfolio on the Macusani Plateau of southeastern Peru.
According to a letter of intent, Macusani would issue 68.35 million shares — worth US$6.3 million based on Macusani’s closing share price at press time — for the property package, giving Azincourt shareholders a 30% equity stake in Macusani.
A preliminary economic assessment (PEA) in late 2013 of Macusani’s regional property package delineates 48 million measured and indicated tonnes grading 0.025% uranium oxide (U308), along with 40.5 million inferred tonnes averaging 0.028% U308.
Known uranium occurrences in the district are associated with Pliocene Quenamari Formation tuffs, ignimbrites and interbedded sediments in a northwest- to southeast-trending graben. Uranium in the form of pitchblende, uranophane, gummite and meta-autunite occurs mostly in a fluvio-lacustrine sediment between two pyroclastic units.
Azincourt completed the acquisition of its Minergia portfolio from Vena Resources (TSX: VEM, US-OTC: VNARF) and joint-venture partner Cameco (TSX: CCO, NYSE: CCJ) in January. The Minergia assets have seen US$12 million in exploration, which delineated 34.2 million indicated tonnes grading 0.018% U308, and 39 million inferred tonnes grading 0.022% U308.
The Minergia concessions are next to Macusani’s resource-stage projects, which means that with the latest deal, Macusani could consolidate 950 sq. km for a potential uranium operation.
Macusani says it “expects that Azincourt’s adjacent uranium resources can be easily incorporated into the existing mine plan.”
Macusani’s PEA modelled a US$331-million operation that would produce an average 4.3 million lb. U308 annually over a 10-year life. Assuming a US$52 per lb. U308 price, the project would carry a 31% pre-tax internal rate of return and US$374 million net present value at an 8% discount rate.
The agreement would also merge management teams under the new Macusani banner. Macusani president and CEO Laurence Stefan would become president and chief operating officer of the enlarged Macusani, while Azincourt president and CEO Ted O’Connor would become Macusani’s CEO.
“As a former director with Cameco, I’ve had the opportunity to evaluate uranium projects all over the world, and I believe that the investment community will be hard-pressed to identify an investment opportunity in the uranium sector that is more attractive in the context of the current market than Macusani,” O’Connor said in the release. “Once combined, Macusani will offer one of the largest contiguous uranium resource bases, the potential for substantial synergies from a combined mine plan and exploration upside, which is rare to find.”
With its Peruvian assets placed into Macusani, Azincourt will be better positioned to focus on its joint venture with Fission 3.0 (TSXV: FUU; US-OTC: FISOF) at the Patterson Lake North (PLN) uranium project in Saskatchewan’s Athabasca basin region. PLN sits north of Fission Uranium’s (TSXV: FCU, US-OTC: FCUUF) Patterson Lake South (PLS) high-grade uranium discovery.
Azincourt and Fission 3.0 wrapped up preliminary exploration at PLN in April by concluding a US$1-million, 2,000-metre drilling program that tested three basement electromagnetic conductors.
Results were described as “highly prospective,” with drills intersecting lithological settings having structural complexity analogous to the PL-3B conductor and its association with uranium mineralization at PLS.
Azincourt shares have a 52-week trading range of 10¢ to 35¢, and closed at 20.5¢ per share at press time. The company has 49.5 million shares outstanding for a $10-million market capitalization.
Macusani shares have traded between 5¢ and 16¢ over the past year, and closed at 10¢, with 159 million shares outstanding and a $16-million market capitalization.