An agreement to strategically ally has been signed by PepinNini Minerals of Australia and Sinosteel of China for the joint development and operation of the Curnamona Province project in South Australia, which comprises the Crocker Well and Mount Victoria uranium deposits.
The agreement, signed in Beijing on 7 February, also facilitates an application to the Chinese government for approval of the alliance. The two companies signed a non-binding Memorandum of Understanding for the project in September 2006. The Curnamona Province project contains up to 6750 tonnes U3O8 at 0.05%.
The finalized agreement calls for state-owned Sinosteel to pay a non-refundable A$1 million ($780,000) for an exclusivity period of 60 days, expiring on 7 April, to obtain approvals from the Chinese and Australian governments and for both parties to finalize an unincorporated joint venture to manage the project. If required, Sinosteel can extend the exclusivity period for two additional periods of 30 days each by paying an additional A$500,000 ($390,000) for each additional period.
Under the terms of the deal, Sinosteel will pay PepinNini A$28.5 million ($22.3 million) for a 60% stake in the Curnamona Province project. In addition, Sinosteel will contribute A$5 million ($3.9 million) towards drilling and preparation of a Bankable Feasibility Study on the uranium resource, as well as A$6 million ($4.7 million) on exploration for commodities other than uranium over a two-year period.
WNA Australia's Uranium and Who Buys It information paper
WNN: China buys into Australian uranium