5 October 2009
ASX
RELEASE
AGREEMENT
TO CREATE MAJOR PLAYER IN ROCK PHOSPHATE
Joint effort to advance
rock phosphate projects in the Northern Territory
Dedicated and separately funded vehicle
to be new major player in the sector
Northern Uranium to remain focused on
advancing its uranium projects
Northern Uranium Limited (ASX: NTU) is pleased to advise its has entered
into a non-binding Heads of Agreement (?HOA?) with
Korean based fertiliser exploration and trading company FSL Resources Limited (FSL)
to combine and advance their rock phosphate projects.
Under the agreement, the two companies will combine
their respective phosphate interests into a single and dedicated corporate
vehicle, with more than 38,000km2 of prospective phosphate licences in the Northern Territory.
The combination will create a new major player in rock
phosphate in Australia,
and allow Northern Uranium to remain focused on advancing its uranium projects,
and in particular the Gardiner-Tanami Project.
FSL established an Australian subsidiary FSL World
Holdings Pty Ltd (FSLWH) in 2005 to identify prospective rock phosphate
exploration and development opportunities in the Northern Territory.
FSLWH had the advantage of moving early in the search for rock phosphates in
the region and was successful in acquiring approximately 32,000km2 of
exploration licences in the Northern Territory
some of which cover ground with historical records of phosphate rock
exploration.
The areas were selected on the basis of historical
rock phosphate exploration results and a more recent Northern Territory
Geological Survey compilation of data from numerous water
bores identifying areas with enriched phosphatic
sedimentary units. The most advanced of FSLWH’s
projects is the Barkly Project comprising two granted exploration licences
approximately in the centre of the Georgina Basin and immediately
north of Minemakers Wonarah
deposit (Figure 1). Historical drilling confirms the phosphate potential of
these tenements.
Northern Uranium began acquiring tenements for
phosphate exploration in the Northern Territory
in 2008, having recognised the potential for phosphate mineralisation in the Kurundi Project tenements. Northern has now assembled a
large phosphate exploration package comprising 14 exploration licences covering
a total of 6,400km2 within the Georgina
Basin
and the Amadeus Basin (Figure
1).
Under the terms of the HOA Northern Uranium
will, subject to due diligence, vend into FSLWH its phosphate rock tenement and
intellectual property interests in return for shares. Upon completion, Northern
Uranium will hold approximately 30% of the issued capital of FSLWH and two
directors from Northern Uranium will be appointed to FSLWH’s
Board. Following due diligence a binding agreement is expected to be finalised
by the end of the December quarter.
If the transaction proceeds, Northern Uranium will
contribute $65,000 of seed capital to FSLWH, and current FSLWH shareholders
will co-invest $65,000 for working capital and for a small drilling program on
the highly prospective Barkly tenements. FSLWH will then raise additional funds
independent of Northern Uranium which will focus on its uranium exploration
activities.
Commenting on the proposed business combination
Northern Uranium’s Executive Chairman Mr Kevin Schultz said:
FSLWH through its Board of Directors brings experience and strong
relationships in the fertiliser industry to the proposed business combination
and Northern Uranium sees this transaction as an excellent way for our Company
to derive value from non-core phosphate exploration tenements.
We look forward to working with FSLWH’s
Board and Management to create a new force in rock phosphate exploration and
development, Mr Schultz said. Northern Uranium remains committed to uranium
exploration with our key focus being the Gardiner-Tanami Project, and the
proposed phosphate transaction reinforces that strategy.
About Northern Uranium
Northern Uranium Limited is primarily a uranium exploration and
development company and holds large and prospective projects in Western Australia and the Northern Territory.
The Company has a strategic alliance with the French nuclear group, Areva
NC,
via its wholly owned subsidiaries, Areva NC Australia
Pty Ltd (Areva) and Afmeco
Mining and Exploration Pty Ltd (Afmex). Areva, which has a substantial shareholding in Northern
Uranium, is the operator, through Afmex, of uranium
exploration and development of the Gardiner-Tanami Project, and will also
market any uranium produced by Northern Uranium.
Northern Uranium recently completed a share right
issue to raise approximately $2.2 million to fund ongoing exploration at the
Gardiner-Tanami project.
For
Further Information Contact:
Northern Uranium Executive Chairman
Kevin Schultz
(+61) 409108977
Northern Uranium General Manager
Robin Wilson
(+61) 08 9481 2344
Figure 1 Map showing the Proposed Combined Tenement Package
Competent Person Declaration
The information in this report accurately reflects information prepared
by competent persons (as defined by the Australasian Code for Reporting of
Mineral Resources and Ore Reserves). It is compiled by Mr K Schultz, an
employee of the Company who is a Fellow of The Australasian Institute of Mining and
Metallurgy with the requisite experience in the field of activity in which he
is reporting. Mr Schultz has sufficient experience which is relevant to the
style of mineralisation and the type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent person as defined in
the 2004 Edition of the ?Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves?. Mr Schultz consents to the
inclusion in the report of the matters based on his information in the form and
context in which it appears.