Foremost Lithium Resource & Technology Ltd. (
NASDAQ:
FMST) (
CSE: FAT) (“
Foremost
Lithium”, “
Foremost” or the
“
Company”) is pleased to announce today that it
has executed a property acquisition agreement (the “
Option
Agreement”) with Denison Mines Corp.
(“
Denison”), which grants Foremost an option to
acquire up to 70% of Denison’s interest in 10 uranium exploration
properties, along with other ancillary agreements (collectively,
the “
Transaction”). Pursuant to the Transaction,
Foremost will provide Denison with consideration, including cash,
stock, and/or future exploration spending commitments by Foremost.
The Transaction is subject to regulatory approvals. In connection
with the Transaction, Foremost intends to change its name to
“Foremost Clean Energy Ltd.” Full details of the terms of the
Transaction and the name change are outlined below under “Key Terms
of the Transaction and Name Change”.
“We are pleased to
announce a transformative transaction with Denison, a clear leader
in the uranium sector. Uranium prices have seen significant
strength in recent years driven by the global demand for clean
energy, which has been reinforced by supportive government policies
and geopolitical events underscoring the need for reliable western
uranium supply. The Athabasca Basin is recognized as one of the
world’s leading uranium jurisdictions, with numerous producing
mines and high-profile development projects. This collaboration
will advance significant near-term exploration and development
efforts across numerous high-quality exploration projects to
maximize the properties’ potential for the benefit of both Foremost
and Denison shareholders,” stated Foremost’s President and
CEO, Jason Barnard. Further, Barnard added, “On behalf of
the entire team, I’d like to warmly welcome David Cates to our
Board. As Denison’s current President and CEO, Mr. Cates will be an
invaluable member adding his extensive experience and a proven
track record in the Canadian uranium mining space.
As a junior explorer, having the support of Mr. Cates and Denison
will provide Foremost a competitive advantage. We are confident
that Foremost is entering a new chapter of growth, and enhanced
outcomes, for the benefit of both companies’ shareholders.
We look forward to working with Mr. Cates as we steer and
support our Company’s expansion towards its goal of being a new
leading uranium explorer in the Athabasca
Basin.”
David Cates, President and CEO, commented,
“Denison is pleased to work with Foremost
to enhance the potential for discovery on an excellent portfolio of
uranium exploration properties that would otherwise receive little
attention from Denison with our current focus on development and
mining stage projects. We are impressed with Foremost’s leadership
team and technical capabilities and are excited to see
high-potential exploration work being carried out on these
properties in the coming years.”
Transformational Transaction Covering
High-Potential Uranium Properties
The project portfolio subject to the Option
Agreement consists of 10 properties comprised of 45 claims covering
an aggregate area of 332,378 acres (134,509 hectares) within the
Athabasca Basin region of northern Saskatchewan (the
“Exploration Properties”), which is known for its
prolific history of large high-grade uranium discoveries and
operating mines—currently producing ~20% of the world’s primary
uranium supply1. Many of the Exploration Properties are proximal to
some of the world’s highest-profile uranium operations, such as the
McClean Lake mill and Cigar Lake mine, and consist of projects at
different stages of exploration, from grassroots exploration to
those with significant historical exploration and drill-ready
exploration targets.
Generally, the most prospective exploration
ground in the eastern portion of the Athabasca Basin is proximal to
the Wollaston-Mudjatik Transition Zone (“WMTZ”)
and has already been staked by existing uranium producers,
developers, and explorers. As illustrated in Figure 1 below, the
Transaction offers Foremost a unique opportunity to acquire a
sizeable portfolio of well-situated properties (including several
situated along the WMTZ) to facilitate a pivot towards a future
focus on uranium exploration in a top jurisdiction.
Figure 1. Detailed Map of Exploration
Properties being Acquired by Foremost
Eastern Properties
Seven (7) of the Exploration Properties are
situated within the Eastern portion of the Athabasca Basin region,
in proximity to significant existing regional infrastructure,
including: Murphy Lake South, Hatchet Lake, Turkey Lake, Torwalt
Lake, Marten, Wolverine and Epp Lake (collectively, the
“Eastern Properties”). Several of the Eastern
Properties host previously identified uranium mineralization in
geological settings similar to other known uranium discoveries.
Historical drilling has focused primarily on unconformity targets,
which provides Foremost further opportunity for continued
exploration of potential basement style mineralization. Hatchet
Lake is currently undergoing an active summer drilling and
evaluation program, while several of the projects contain
drill-ready targets from previously conducted exploration programs.
The Eastern Properties are highlighted by the following
projects:
- Murphy
Lake South: conductive corridors that host significant
high-grade uranium mineralization may extend onto the property;
unconformity depth of ~350m
- Hatchet
Lake: historical mineralization has been identified along
the Richardson trend; uranium and base metal enrichment has also
been encountered on the property with untested areas identified for
follow up
- Torwalt
Lake: Adjacent to the McClean Lake Operation and within
5km of multiple uranium deposits; potential to identify Key Lake or
Collins Bay analogues
Blue Sky Properties
Three (3) of the Exploration Properties are
located in the northwestern portion of the Athabasca Basin region
(the “Blue Sky Properties”), representing an area
of comparative under-exploration and high potential for new
discovery, including Blackwing, GR and CLK, which encompass
~250,000 acres (101,634 hectares). These three projects are
virtually unexplored. Holes drilled to date at CLK have intersected
uranium mineralization, and regional geological surveys compiled by
the Government of Saskatchewan indicate the potential for
favourable geological settings for uranium mineralization at each
property. The Blue Sky Properties are highlighted by the
following:
-
Blackwing and GR: both projects are situated on
regional structures; Black Bay Fault and Grease River Shear – the
Black Bay Fault hosts multiple Beaverlodge-style deposits in the
Uranium City area
-
CLK: only two historic drill holes are known to
have been completed on the property, each of which intersected
uranium mineralization, including CLG-D1 (up to 8,600 ppm U) and
CLG-D5 (up to 510 ppm U)
Collaboration with Denison
Denison (TSX: DML) (NYSE American: DNN) is a
leading Athabasca Basin-focused uranium mining, development, and
exploration company. Denison’s current focus is advancing the
Wheeler River project, which represents the largest undeveloped
uranium mining project in the infrastructure rich eastern portion
of the Athabasca Basin. Denison has a significant team of technical
experts based in its office in Saskatoon, Saskatchewan, and this
best-in-class team is ideal for supporting Foremost with its
technical, operating and corporate initiatives. Upon completion of
Phase 1 of the Option Agreement, Denison will be the largest
shareholder of Foremost, holding ~19.95% of the shares outstanding
and will retain an ownership interest in the Exploration
Properties. Additionally, David Cates, President and CEO of
Denison, is expected to join Foremost’s Board of Directors.
Foremost expects to act as project operator
during the term of the Option Agreement and will conduct the
exploration programs with its geological team led by Dahrouge
Geological Consulting, under the guidance of Jody Dahrouge. Mr.
Dahrouge has a long history of uranium exploration and discovery,
which includes the generation of several projects on behalf of
Strathmore Minerals Corp. and its successors, including the J Zone
(now the Tthe Heldeth Túé deposit) on the Waterbury Lake property,
the JR Zone on the Patterson Lake North property and the Triple R
Zone at the Patterson Lake South property. As a past President and
COO of Fission Energy Corp. (“Fission Energy”),
Jody played a key role in the acquisition and exploration of
Fission Energy’s exploration property portfolio, which culminated
with the eventual acquisition of Fission Energy by Denison in
2013.
Key Terms of the
Transaction
Under the terms of the Option Agreement,
Foremost may acquire up to 70% of Denison’s interest in the
Exploration Properties. Denison currently has 100% ownership in all
of the properties except for Hatchet Lake, where Denison currently
owns 70.15%, subject to a joint venture with Eros Resources Corp.
In the case of Hatchet Lake, Foremost may earn up to a 51% interest
in the joint venture, representing slightly over 70% of Denison’s
current ownership interest. The Option Agreement outlines three (3)
phases, as summarized below:
Phase 1: |
To earn an initial 20% interest in the Exploration Properties
(14.03% for Hatchet Lake), on or before October 7, 2024 (the
“Effective Date”), Foremost’s obligations include:
- Issuing 1,369,810 of the Company’s
common shares (the “Common Shares”) to
Denison;
- Appointing one director to
Foremost’s Board of Directors immediately on the Effective
Date;
- Appointing a Technical Advisor to
Foremost at Denison’s election; and
- Entering into an Investor Rights
Agreement providing for, among other things:
- The appointment by Denison of up to
two (2) individuals to the board of directors of Foremost;
and
- A pre-emptive
equity participation right to invest in Foremost’s Common Shares to
maintain its 19.95% interest.
|
Phase 2: |
To earn an additional 31% interest in the Exploration Properties
(21.75% for Hatchet Lake), on or before 36 months following the
Effective Date, Foremost’s obligations include:
- Paying $2,000,000, in cash or
Common Shares or a combination thereof, at the discretion of
Foremost to Denison; and
- Incurring $8,000,000 in exploration
expenditures on the Exploration Properties.
If the conditions of Phase 2 are not satisfied, Foremost shall
forfeit its interests in and rights to the Exploration
Properties. |
Phase 3: |
To earn an additional 19% interest in the Exploration Properties
(15.22% for Hatchet Lake), on or before 36 months following the
successful completion of Phase 2, Foremost’s obligations include:
- Paying $2,500,000, in cash or
Common Shares or a combination thereof, at the discretion of
Foremost to Denison; and
- Incurring $12,000,00 in exploration
expenditures on the Exploration Properties.
If the conditions of Phase 3 are not satisfied, Foremost shall
forfeit a portion of its interests in and rights to the Exploration
Properties such that Denison’s interests in the Exploration
Properties will be increased to 51% and operatorship shall revert
to Denison. |
Upon the successful completion of the Option
Agreement, the parties would enter into a formal joint venture
agreement in respect of the Exploration Properties where the
initial ownership interests of Foremost and Denison will be
determined based on satisfaction of conditions pursuant to the
Option Agreement.
Uranium Overview
The global clean energy transition has increased
the need for alternative fuel sources with nuclear power prevailing
as a crucial component to meet the demand for a green economy.
“Market sentiments on uranium are positive including equity
markets, and particularly look favourable for uranium developers”
wrote Sehaj Anand, a research analyst for FactSet (What’s Driving
the Bull Run in Uranium, May 2024). The commodity price rose above
US$100/lb U3O8 last year, the highest since 2007, after a
decade-long decline from US$143/lb U3O8 to US$18/lb U3O8 and is
currently sitting at ~US$80/lb U3O8.
Uranium: Supply vs Demand
The supply side’s future outlook is forecasted
to underserve the demand side. Some of the factors contributing to
an increase in the demand for uranium globally include: the desire
to phase out dependence on fossil fuels, depressed uranium prices
over the past decade and mine closures and/or disruptions. Trade
sanctions on Russia are affecting enriched uranium supply to the
West and civil unrest in Niger have sparked a global urgency to
secure reliable sources of uranium.
Figure 2. Uranium Spot Prices History
with Key Events Source: Factset UxC CME
Most recently, uranium producers, developers,
and physical uranium holding companies have continued to buy
physical uranium, putting a further strain on the uranium supply.
With the scarcity of nuclear fuel, there is a growing sense of
urgency to secure sufficient uranium supply, adding additional
pressure on the overall uranium market 2.
Figure 3. Global Uranium Supply and
Demand (million pounds
U3O8
- per UxC Q3’24)Note: Data in this slide has been
derived from UxC’s Uranium Market Outlook dated Q3’2024, including
supply & demand estimates and market balance figures. Source:
Denison Investor Presentation – September 2024.
Market Outlook
Nuclear energy has the lowest carbon footprint
for power generation compared to any other source and is the most
reliable option for carbon-free baseload electricity generation3.
At the 2023 United Nations Climate Change Conference or Conference
of the Parties of the UNFCCC (more commonly known as COP 28), a
total of 22 countries agreed to target tripling nuclear capacity by
2050 as countries focus on energy security and affordability. The
biennial Nuclear Fuel Report said demand for uranium is expected to
rise to 83,840 tonnes by 2030 and 130,000 tonnes by 2040, from
65,650 in 2023.4
Name Change
With Foremost’s business activities to be
focused on exploration efforts to discover source fuel for clean
energy solutions, including both uranium and lithium, the Board of
Directors have unanimously agreed to change the Company’s name to
“Foremost Clean Energy Ltd.” Foremost will continue trading under
the same symbols, “FMST” as listed on the Nasdaq, and “FAT” as
listed on the CSE, subject in each case to regulatory approval. The
CUSIP number assigned to the Company’s shares following the name
change will be CUSIP (34546R100) and ISIN
(CA34546R1001).
The CSE will publish a bulletin announcing the
effective date of the change in Foremost’s name. The Company’s
common shares are anticipated to commence trading on both the CSE
and Nasdaq under its new name and CUSIP number at market open on or
about Sept 27, 2024. No action is required to be
taken by shareholders with respect to the name change. Outstanding
share certificates are not affected by the name change and do not
need to be exchanged.
To see full details of the Option Agreement,
Investor Rights Agreement, and other related documents in
connection with the Transaction, please refer to the Company’s
filings under its profile on Sedar+ at www.sedarplus.ca and on
Edgar at www.sec.gov/edgar.shtm. The Company retained an
arm’s-length financial advisor in connection with the Transaction
which will be entitled to a transaction fee equal to 4% of the
anticipated transaction value, payable in common shares following
the Effective Date. In addition, an arm’s-length third party
will be paid a finder’s fee equal to 8% of the deemed value of the
share consideration payable to Denison pursuant to the first phase
of the Transaction, payable in common shares following the
Effective Date. The Transaction, including the payment of the
foregoing fees, and name change are subject to certain regulatory
approvals, including those of the NASDAQ and the CSE. All Common
Shares issued pursuant to the Transaction are subject to a hold
period of four months and one day, in accordance with applicable
Canadian Securities Laws.
About Denison
Denison is a uranium mining, 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 FS was completed for the
Phoenix deposit as an ISR mining operation, and an update to the
previously prepared 2018 Pre-Feasibility Study ('PFS') 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 have advanced
significantly, with licensing in progress and a draft Environmental
Impact Study ('EIS') submitted for regulatory and public review in
October 2022.
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%).
Denison has a market capitalization of
approximately ~$2.1billion
(~US$1.6 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'.
Qualified Person
Technical information in this news release has
been reviewed and approved by Jody Dahrouge, B.Sc., Sp.C., P. Geo
who is a Qualified Person as identified by Canadian National
Instrument 43-101-Standards of Disclosure for Mineral Projects and
as defined by the Securities and Exchange Commission’s Regulation
S-K 1300 rules for resource deposit disclosure.
About Foremost
Foremost (NASDAQ: FMST) (CSE: FAT) (FSE: F0R0)
(WKN: A3DCC8), assuming the effectiveness of the Transaction, will
be an emerging North American uranium exploration company with
interests in 10 prospective properties spanning over 330,000 acres
in the prolific, uranium-rich Athabasca Basin. As global demand for
decarbonization accelerates, the need for nuclear power is crucial.
Foremost expects to be positioned to capitalize on the growing
demand for uranium through discovery in a top jurisdiction with the
objective to support the world’s energy transition goals. Alongside
its exploration partner Denison, Foremost will be committed to a
strategic and disciplined exploration strategy to identify
resources by testing drill–ready targets with identified
mineralization along strike of recent major discoveries.
Foremost also maintains a secondary portfolio of
significant lithium projects at different stages of development
spanning over 50,000 acres across Manitoba and Quebec. For further
information please visit the company’s website at
www.foremostcleanenergy.com.
Contact and Information
CompanyJason Barnard, President and CEO+1 (604)
330-8067 info@foremostcleanenergy.com
Investor RelationsLucas A. ZimmermanManaging
DirectorMZ Group - MZ North America(949) 259-4987FMST@mzgroup.us
www.mzgroup.us
Follow us or contact us on social
media:Twitter: @[foremostcleanenergy]Linkedin:
https://www.linkedin.com/company/foremost-lithium-resource-technology
Facebook: https://www.facebook.com/ForemostLithium
Forward-Looking Statements
Except for the statements of historical fact
contained herein, the information presented in this news release
and oral statements made from time to time by representatives of
the Company are or may constitute “forward-looking statements” as
such term is used in applicable United States and Canadian laws and
including, without limitation, within the meaning of the Private
Securities Litigation Reform Act of 1995, for which the Company
claims the protection of the safe harbor for forward-looking
statements. These statements relate to analyses and other
information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of
management. Any other statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
“expects” or “does not expect,” “is expected,” “anticipates” or
“does not anticipate,” “plans,” “estimates” or “intends,” or
stating that certain actions, events or results “may,” “could,”
“would,” “might” or “will” be taken, occur or be achieved) are not
statements of historical fact and should be viewed as
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such risks and other factors include,
among others, the availability of capital to fund programs and the
resulting dilution caused by the raising of capital through the
sale of shares, continuity of agreements with third parties and
satisfaction of the conditions to the Transaction, risks and
uncertainties associated with the environment, delays in obtaining
governmental approvals, permits or financing. Although the Company
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its
expectations will be achieved. Forward-looking information is
subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from those projected. Many of
these factors are beyond the Company’s ability to control or
predict. Important factors that may cause actual results to differ
materially and that could impact the Company and the statements
contained in this news release can be found in the Company’s
filings with the Securities and Exchange Commission. The Company
assumes no obligation to update or supplement any forward-looking
statements whether as a result of new information, future events or
otherwise. Accordingly, readers should not place undue reliance on
forward-looking statements contained in this news release and in
any document referred to in this news release. This news release
shall not constitute an offer to sell or the solicitation of an
offer to buy securities. and information. Please refer to the
Company’s most recent filings under its profile at on Sedar+ at
www.sedarplus.ca and on Edgar at www.sec.gov/edgar.shtm for further
information respecting the risks affecting the Company and its
business.
The Canadian Securities Exchange has neither
approved nor disapproved the contents of this news release and
accepts no responsibility for the adequacy or accuracy hereof.
___________________________________
1 https://investingnews.com/innspired/global-uranium-supply-athabasca-basin/2
https://insight.factset.com/whats-driving-the-bull-run-in-uranium3
https://www.energy.gov/ne/articles/nuclear-power-most-reliable-energy-source-and-its-not-even-close4
https://www.nucnet.org/news/uranium-demand-expected-to-surge-by-28-by-2030-9-5-2023
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/8ab29c64-9b71-4214-b45c-5bf30775c661
https://www.globenewswire.com/NewsRoom/AttachmentNg/3edf9168-6456-473f-bb42-dd4c2c917b13
https://www.globenewswire.com/NewsRoom/AttachmentNg/03b19377-f5e5-4379-bf49-3567c0ca0c2b
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