Stellar Resources Limited, via its wholly owned subsidiary Hitaba Gold Pty Ltd, holds Exploration Licence EL 6350 over the Midgee Uranium Project on Eyre Peninsular, South Australia.
EL6350 reached the end of its initial 2 year licence term on 25 March 2021. Stellar has applied for a further 2 year renewal of EL6350 in February 2020, relinquishing the previously held 73km2 area to a retained area of 38 km2. The renewal application is currently being processed by Department for Energy and Mining, SA.
On 18th May 2021, Stellar entered into a Binding Term Sheet with Alligator Energy Limited (ASX:AGE, or “Alligator”) to sell EL6350 for a total consideration of 7,105,263AGE shares. Key terms of the Binding Term Sheet signed between Stellar and Alligator include:
- Stellar’s 100% owned subsidiary, Hiltaba Gold Pty Ltd has agreed to sell EL6350 to Alligator’s 100% owned subsidiary, S Uranium Pty Ltd (SUPL) for a total consideration of 7,105,263 AGE shares.
- The transaction is subject to obtaining necessary regulatory approvals including;
- Approval of the EL6350 renewal application lodged on 19th February 2021 by the South Australian Department for Energy and Mining (DEM), and
- Ministerial approval of the transfer of EL6350 to SUPL.
- The issue of Alligator shares payable to Stellar under the transaction is subject to approval by AGE shareholders at an Extraordinary General Meeting targeted to be held at the end of June 2021.
- The transaction is also subject to Hiltaba completing all 2020/21 compliance reporting obligations to DEM which are due by 25 May 2021.
- Alligator will assume all tenement expenditure commitments and liabilities in relation to EL6350 at the time the transaction completes and will also cover annual rentals and other costs from the date of executing the Binding Terms Sheet.
Results of the 2010 drilling on EL6350 indicate that the licence is unlikely to have the potential to support a stand-alone project and as such is a non-core asset for Stellar. Stellar will benefit from the 7.1M AGE to be paid as consideration for the transaction providing an investment exposure to the uranium sector and to Alligators exciting portfolio of projects. The sale will also result in savings to Stellar in expenditure commitments and tenement management costs for EL6350 moving forward.
The retained 38 km2 area of EL6350 under renewal application contains two geologically and physically distinct blocks: the NE Block and the SW Block
The north east block is prospective for southern continuations of the known Plumbush sediment hosted uranium deposit (north of the EL boundary within EL 5926 held by Alligator Energy Limited). Previous rotary mud drilling completed by Stellar’s JV partner in 2010, UraniumSA Limited, intersected potentially economic sediment hosted uranium mineralisation in a number of holes within the northern part of the NE block.
Hole MRM136 provided the best result with an intersection of 7.6m at 0.041% eU3O8, including 1.4m grading 0.106% eU3O8. Hole MRM137, 800m to the east of MRM136 recorded an intersection of 5.0m grading 0.032% eU3O8. Other significant intersections included: MRM128 (2.9m grading 0.016% eU3O8), MRM127 (0.7m grading 0.039% eU3O8), and MRM138 (0.5m grading 0.014% eU3O8).
A south-western block which is prospective for uranium and base metals mineralisation associated with the Hiltaba age Charleston granite.
EL6350 – February 2021 Renewal Application Tenement Location Map
EL6350 Midgee: NE Block 2010 USA Drilling with best intercept U3O8 grades