Heavy Rare Earths to acquire high-calibre SA uranium projects from Havilah Resources

Heavy Rare Earths (ASX: HRE) has entered into an agreement with Havilah Resources (ASX: HAV) to acquire the Radium Hill, Lake Namba-Billeroo and Prospect Hill uranium projects in north-eastern South Australia.

The three projects cover a total area of 2,949 square kilometres across 22 tenements or part-tenements in the uranium-rich Curnamona Province in an area that hosts two operating in-situ leach (ISL) mines at Honeymoon – owned by Boss Energy (ASX: BOE) – and Four Mile, owned by private company Heathgate Resources.

Heavy Rare Earths plans to initially target extensions of the Radium Hill deposit, the southern extension of the Billeroo palaeochannel, the southern Namba palaeochannel and potential palaeochannels north and east of Prospect Hill.

Exploration commitment

Heavy Rare Earths will earn an initial 80% interest in the uranium rights on all projects by spending $3 million on exploration and development activities over a three-year period, including a minimum of $1m in the first year.

Consideration for the deal will be in the form of 38 million fully paid ordinary Heavy Rare Earths shares issued to Havilah, plus 17.5 million unlisted options with an exercise price of $0.06 and a three-year term.

Once the 80% interest has been earned, Havilah will be free-carried on any new uranium discovery until completion of a bankable feasibility study, after which it may contribute its pro-rata share of all future expenditure or dilute to a 1.5% net smelter royalty on production from that deposit.

Commanding position

Heavy Rare Earths executive director Richard Brescianini said the acquisition would deliver a commanding ground position in SA.

“This agreement provides us with an excellent pipeline of projects […] along strike from where 2.6 million pounds of uranium was mined in the 1950s, yet has seen no modern exploration in the 60 years since,” he said.

Curnamona and surrounding palaeochannels of the Frome Embayment and Callabonna Sub-basin have a total endowment of approximately 362Mlb of uranium oxide.

Uranium upside

Havilah technical director Dr Chris Giles said the deal would offer potentially significant uranium market exposure and uranium project development upside.

“This agreement is a way for our company to monetise a portion of our remaining uranium assets, for which we are currently receiving neither inherent market recognition nor any value,” he said.

“We are confident that Heavy Rare Earths will conduct serious and competent exploration for uranium in this well-recognised and highly prospective geological terrain.”

Low-cost opportunity

Radium Hill is located along strike from the historic uranium deposit of the same name, which produced 2.6Mlb at 1,200 parts per million (0.12%) uranium oxide plus rare earths for seven years from 1954.

Historical intercepts of up to 12,400ppm (1.24% uranium oxide equivalent) were recorded in drilling and costeans, and there has been no further exploration on the acreage since the operation closed in 1961.

There has also been no reported uranium exploration since 2012 at Lake Namba-Billeroo, which comprises 15 kilometres of unexplored prospective Billeroo palaeochannel that also hosts Boss Energy’s Gould’s Dam resource of 25Mlb at 520ppm uranium oxide.

Prospect Hill hosts an untested geological analogue to Heathgate’s prolific Beverley-Four Mile uranium camp, which produced 166Mlb at 2,600ppm (0.26%) uranium oxide.

Mr Brescianini said the projects present a low-cost opportunity to discover hard rock and sedimentary (palaeochannel-hosted) uranium deposits in SA, currently the only state to host operating uranium mines.