Highlights
- Transformational opportunity to acquire up to a 70%
interest in 10 highly-prospective uranium projects in the Athabasca
Basin and collaborate with Denison Mines (TSX: DML, NYSE American:
DNN)
- Foremost Lithium to change its name to Foremost Clean
Energy Ltd.
- David Cates, Denison's President and CEO, is expected
to join Foremost's Board of Directors
VANCOUVER, British Columbia, Oct 10, 2024 -- InvestorsHub
NewsWire -- 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
Company
Jason Barnard, President and CEO
+1 (604) 330-8067
info@foremostcleanenergy.com
Investor Relations
Lucas A. Zimmerman
Managing Director
MZ Group - MZ North America
(949) 259-4987
FMST@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-uranium
3 https://www.energy.gov/ne/articles/nuclear-power-most-reliable-energy-source-and-its-not-even-close
4 https://www.nucnet.org/news/uranium-demand-expected-to-surge-by-28-by-2030-9-5-2023
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