Blue Sky Uranium Announces Transaction to Advance the Ivana Uranium Deposit through Feasibility and then to Commercial Production

Rhea-AI Summary

Blue Sky Uranium announced a binding term sheet with Corredor Americano (COAM) to advance the Ivana Uranium-Vanadium Deposit to feasibility and commercial production. COAM can earn up to 50% interest by investing $35M for pre-feasibility and feasibility studies, with an option to increase their stake to 80% by funding 100% of capital costs.

Initial 50% interest is granted by completing feasibility studies; an extra 1% upon funding capital costs and additional 29% for commercial production funding. Blue Sky retains a free carry on capital costs. Plans include exploring and drilling new targets, potentially adding new discoveries to the joint venture.

Definitive agreements are to be negotiated within 90 days, subject to conditions like COAM's due diligence and regulatory approvals. The partnership aims to expedite Ivana's progress, leveraging COAM's expertise.

Positive

• COAM to invest $35M for feasibility studies on the Ivana deposit.
• Potential for COAM to fund 100% of capital costs for commercial production.
• Blue Sky retains a free carry on capital costs.
• Opportunity for new discoveries through exploration of adjacent areas.
• Partnership with a capable group in Argentina, Corporación América Group.

Negative

• Completion of the transaction is contingent on several conditions including due diligence and regulatory approvals.
• The transaction may not be completed on the terms described or at all.
• Potential dilution of Blue Sky's interest in Ivana to 20% if COAM fully exercises its options.
• Dependence on COAM's funding and decision to proceed with capital investments.

Insights

Financial Analyst

The agreement between Blue Sky Uranium and Corredor Americano is structured to eventually lead to commercial production of uranium at the Ivana deposit. The financial commitment from COAM, amounting to up to $35 million for feasibility studies and additional capital to move into commercial production, indicates significant confidence in the potential profitability of the Ivana deposit. This investment is substantial and will likely have a positive short-term impact on Blue Sky's stock value as it provides a clear path to production with minimal financial risk to Blue Sky. A key point for investors is the free carry on capital costs, meaning Blue Sky's financial exposure is significantly minimized while still retaining a substantial stake in the project. This strategy is somewhat unusual and highlights Blue Sky's ability to secure favorable terms, reflecting positively on management's negotiation skills.

Legal Expert

The legal structure of the Proposed Transaction is complex but provides both parties with clear rights and obligations, which should reduce the risk of future disputes. The inclusion of a corporate guarantee from COAM ensures that Blue Sky is financially protected during the exploration and feasibility stages. Furthermore, the shareholders' agreement and call option agreement offer a structured framework for governance and future exploration activities. These agreements are important for aligning interests and mitigating risks, ensuring that Blue Sky benefits from any new discoveries while also setting clear parameters for COAM's additional investment stages. This meticulous legal framework is a positive indicator of the project's robustness and the parties' commitment to advancing Ivana towards production.

Market Research Analyst

The uranium market has been experiencing heightened interest due to its role in clean energy initiatives and the global pivot towards more sustainable energy sources. The Ivana deposit, part of the Amarillo Grande Project, has already shown potential for low-cost production. This aligns well with market trends favoring cost-effective and scalable uranium supplies. The financial backing from COAM not only de-risks the project but also positions Blue Sky as a competitive player in the market. Investors should note that the partnership with a well-diversified conglomerate like Corporación América Group also provides additional stability and resources, enhancing Blue Sky's credibility and market position. This strategic alliance could help Blue Sky tap into new markets and possibly secure future contracts, boosting long-term profitability and stock performance.

TSX Venture Exchange:   BSK
Frankfurt Stock Exchange:   MAL2
OTCQB Venture Market (OTC): BKUCF

VANCOUVER, BC, June 10, 2024 /PRNewswire/ - Blue Sky Uranium Corp. (TSX-V: BSK) (FSE: MAL2) (OTC: BKUCF), "Blue Sky" or the "Company") is pleased to announce that it has entered into a binding term sheet (the "Term Sheet") effective as of June 6, 2024 with Corredor Americano S.A. ("COAM"), an Argentine company of the Corporación América Group, to complete an option agreement (the "Proposed Transaction") in respect to the Company's Ivana Uranium-Vanadium Deposit ("Ivana" or the "Property").

Proposed Transaction Highlights (All figures in US dollars):

• COAM can earn up to a 50% indirect interest in the Property by spending up to US$35M and advancing Ivana through to completion of a feasibility study, and to drill key exploration targets located in adjacent areas of the Property.
• Following a positive feasibility study, COAM can earn an additional 1% upon its decision to fund the capital cost of the Project and further 29% interest by funding 100% of the estimated capital costs to achieve commercial production.

Nikolaos Cacos, Blue Sky President & CEO commented, "The recent PEA for our Amarillo Grande Project confirmed the Ivana deposit as a potential candidate for low-cost uranium production. The proposed transaction with COAM provides compelling benefits for Blue Sky and its shareholders by setting a clear path to bring Ivana to production in partnership with one of the most capable groups in Argentina.   Following an initial 50% interest for bringing Ivana to feasibility phase, Blue Sky will receive a free carry on the estimated capital costs in exchange for COAM earning an additional 30% interest in the Project. Furthermore, we are benefiting from substantial investment towards exploration at adjacent Properties, with the potential for new discoveries to be purchased by the JVCO in the future.  We look forward to completing the agreement and quickly moving Ivana forward through the next stages."  

COAM, an arms-length party to the Company, is a subsidiary of Corporación América International sàrl, ultimate parent company of the Corporación América Group. The Corporación América Group (www.corporacionamerica.com) is a conglomerate with diversified investments across Latin America and Europe, with significant stakes in the energy (www.cgc.energy), airport (www.caap.aero), agribusiness, services, infrastructure, transportation and technology sectors.

The parties have agreed for a period of 90 days (the "Interim Period") to negotiate in good faith definitive agreements (the "Definitive Agreements") in connection with the Proposed Transaction.  The obligations to enter into Definitive Agreements remains subject to various conditions, including but not limited to, COAM completing its due diligence and the parties having agreed on the final forms of Definitive Agreements. Accordingly, there can be no assurance that the Definitive Agreements will be entered into nor that the Proposed Transaction will be completed on the terms described above or at all. Completion of the Proposed Transaction will be subject to the terms and conditions of the Definitive Agreements, including obtaining the approval of the TSX Venture Exchange ("TSXV") and Blue Sky shareholder approval.

Proposed Transaction Details

The Proposed Transaction includes but is not limited to the following, subject to the terms and conditions of the Term Sheet:

1. the Company grants to COAM the sole and exclusive option to earn up to a 50% indirect interest in the Property in three stages, each conditional upon COAM funding or securing funding for pre-feasibility and feasibility studies.  
2. COAM delivers a first demand corporate guarantee to the Company guaranteeing COAM's funding commitments.
3. the parties enter into a shareholders' agreement that governs the relationship between the parties in respect to the Property and the joint venture entity ("JVCO") which, among other things, will provide for rights and obligations of the parties in respect of the funding and development of the Property and for the governance of JVCO, including that upon COAM making a decision to proceed with the development of the Property, COAM will be entitled to receive an additional 1% interest (resulting in COAM holding a 51% interest and Minera Ciero Azul, a wholly-owned subsidiary of the Company ("MCA"), holding a 49% interest in JVCO) and, in consideration therefore, COAM being obligated to fund 100% of the estimated costs and expenses to production, upon which COAM can earn an additional 29% interest (resulting in COAM holding an 80% interest and MCA holding a 20% interest in JVCO); and
4. MCA and JVCO enter into a call option agreement which, among other things, will provide JVCO with the right to conduct exploration and drilling activities on certain prospective areas and exploration targets (the "Exploration Targets") and a five year option to acquire the Exploration Targets (the "Call Option") at a price determined by reference to the amount and type of resources and reserves in respect of such properties at the time of exercise of the Call Option, as verified by a technical report prepared in accordance with National Instrument 43-101 – Standards for Disclosure for Mineral Projects.

Advisors

Blue Sky has engaged ACP Capital Markets LLC ("ACP") and Southern Cone Partners ("SCP") as joint financial advisors, Blake, Cassels & Graydon LLP ("Blakes") as Canadian legal advisor and Alfaro Abogados ("Alfaro") as Argentine legal advisor in connection with the Transaction.

About Blue Sky Uranium Corp.

Blue Sky Uranium Corp. is a leader in uranium discovery in Argentina. The Company's objective is to deliver exceptional returns to shareholders by rapidly advancing a portfolio of surficial uranium deposits into low-cost producers, while respecting the environment, the communities, and the cultures in all the areas in which we work. Blue Sky has the exclusive right to properties in two provinces in Argentina. The Company's flagship Amarillo Grande Project was an in-house discovery of a new district that has the potential to be both a leading domestic supplier of uranium to the growing Argentine market and a new international market supplier. The Company is a member of the Grosso Group, a resource management group that has pioneered exploration in Argentina since 1993.

For additional details on the Property, please refer to the technical report entitled "Preliminary Economic Assessment Update for the Ivana Uranium-Vanadium Deposit, Amarillo Grande Project" with an effective date of December 31, 2023 available on the Company's SEDAR+ profile at www.sedarplus.ca.

ON BEHALF OF THE BOARD

"Nikolaos Cacos"

______________________________________

Nikolaos Cacos, President, CEO and Director

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. All statements, other than statements of historical fact, that address activities, events or developments the Company believes, expects or anticipates will or may occur in the future, including, without limitation, the Proposed Transaction; the use of proceeds; the strengths, characteristics and potential of the Proposed Transaction; the negotiation and execution of the Definitive Agreements; the Company's plans for, and the future prospects of, the Property and other mineral properties; COAM exercising its rights under the Definitive Agreements; JVCO exercising the Call Option; the successful commencement of commercial production at the Property; the consummation and timing of the Proposed Transaction; and satisfaction of the conditions precedents, including obtaining TSXV and shareholder approval are forward-looking statements.

Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. As the obligations to enter into Definitive Agreements remains subject to various conditions, there can be no assurance that the Definitive Agreements will be entered into nor that the Proposed Transaction will be completed on the terms described above or at all. Factors that could cause actual results or events to differ materially from current expectations include, among other things: failure to receive TSXV approval or shareholder approval; failure to satisfy the condition precedents, including successful negotiation of Definitive Agreements; the potential that the Proposed Transaction could be terminated under certain circumstances; risks and uncertainties related to the ability to obtain, amend, or maintain licenses, permits, or surface rights; risks associated with technical difficulties in connection with mining activities; and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations. Actual results may differ materially from those currently anticipated in such statements.

Readers are encouraged to refer to the Company's public disclosure documents for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation to publicly update or revise any forward-looking statements, unless required pursuant to applicable laws.

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SOURCE Blue Sky Uranium Corp.

FAQ

What is the proposed transaction between Blue Sky Uranium and COAM?

Blue Sky Uranium entered into a binding term sheet with COAM to advance the Ivana Uranium-Vanadium Deposit to feasibility and commercial production, potentially earning COAM up to 80% interest.

How much is COAM investing into the Ivana deposit?

COAM is investing up to $35M to complete feasibility studies and has an option to fund 100% of the capital costs for commercial production.

What percentage of the Ivana deposit will COAM own?

Initially, COAM can earn up to a 50% interest by funding feasibility studies. This can increase to 80% if they fund the commercial production.

What are the conditions for the completion of the transaction?

The transaction is subject to COAM's due diligence, negotiation of definitive agreements, and regulatory approvals, including TSX Venture Exchange and Blue Sky shareholder approval.

What is the timeframe for negotiating the definitive agreements?

The parties have agreed to a 90-day period to negotiate and finalize the definitive agreements.