Azincourt Energy has signed a letter of intent with on investor to provide funding of $750,000 towards the company’s ongoing winter work program at the East Preston Uranium Project.
The project is located in the southwestern Athabasca basin in Saskatchewan, Canada.
In consideration for providing funding of at least $750,000 towards development of the project, prior to March 31, 2019, the Investor will earn a ten percent beneficial interest in the Project. Following the Investor earning such an interest, the Company will have the right to redeem the interest from the Investor in consideration for a payment of $750,000 which will be satisfied through the issuance of common shares of the Company based upon the last closing price of the Company’s shares on the TSX Venture Exchange immediately prior to the exercise of the right. The redemption right will be exercisable for a period of thirty days following the Investor earning an interest in the Project.
“This LOI represents a structurally beneficial financing mechanism that ensures our ongoing work at East Preston is fully-funded, which would satisfy the second year earn-in requirements of the current joint-venture agreement,” said president & CEO, Alex Klenman.
“As an advanced uranium exploration project in the most prolific uranium district in the world, drill testing East Preston is a top priority for Azincourt. Given the positive nature of the work to date, the location and quality of companies working in the area, and the awakening uranium market in general, East Preston provides a unique and compelling risk-reward scenario.”
The company is currently working to earn a 70% interest in the Project as part of a joint venture with Skyharbour Resources and Clean Commodities. The acquisition of any interest in the Project by the Investor is subject to the terms of that joint venture and is dependent upon the Company earning an interest in the Project. The interest to be acquired by the Investor will be contributed entirely by the Company and will ultimately reduce the Company’s interest in the Project by a corresponding amount.
Completion of the transaction contemplated by the letter of intent remains subject to a number of conditions, including the successful completion of a due diligence review of the Project, negotiation of definitive documentation and approval of the TSX Venture Exchange. The transaction is also subject to the approval of Skyharbour Resources and Clean Commodities, the company’s partners in the development of the Project. The transaction cannot proceed, and no funding will be provided, until these conditions are either satisfied or waived. There can be no guarantee that the transaction will proceed as planned. The company will provide additional information regarding the transaction as soon as it becomes available.
Source: Company Press Release