Another uranium exploration company has been formed. This one has some important differences.
Based in pro-uranium South Australia; ready-to-drill tenements at Curnamona - close to the producing mine at Beverley and advanced projects at Oban, Honeymoon and 4 Mile - and cornerstone financing from SK Holdings, one of Korea's largest companies.
MKY Resources (ASX: MKY) has entered into a deal to acquire unlisted uranium explorer Callabonna Uranium Limited.
This will involve the issue of new MKY shares in exchange for all Callabonna Uranium shares on issue.
SK Energy Co. Ltd (a subsidiary of SK Holdings one of Korea’s largest companies) has committed to provide an additional $2 million capital to MKY.
The expanded company will likely be renamed and the revised board will have current Callabonna Uranium non-executive Chairman Peter Nightingale and current MKY Managing Director Stephen McCaughey remaining in their respective roles.
Stephen McCaughey said “MKY has been looking for opportunities to diversify its project portfolio for some time and to be able to create a combined company with drill ready sandstone uranium targets in the Frome Embayment area."
McCaughey said the Frome area "needs no introduction as one of the best mineralised uranium terrains in Australia with mineralisation typically being very high grade (such as at Beverley, 4 Mile and Honeymoon) and amenable to in-situ leaching with all the Capex advantages associated with this type of development.”
Under the terms of the deal, MKY will issue 477 million MKY shares in exchange for the 39.5 million current issued shares in Callabonna Uranium.
Completion of the agreement is conditional on the conversion of 5 convertible notes in Callabonna Uranium by SK Energy into shares in Callabonna Uranium and SK Energy agreeing to the sale of those shares to MKY in exchange for an additional 60 million shares in MKY and the discharge by SK Energy of the fixed and floating charge over MKY.
In addition, SK Energy International will subscribe for 120 million fully paid ordinary shares plus 60 million options (each exercisable at 2.5 cents within two years from the date of grant) for a consideration of $2.0 million.
The MKY share price has risen significantly from 0.3 cents to 2 cents since March. However, this new business combination bears watching.
Callabonna Uranium also owns tenements in the Arunta region of the Northern Territory and Georgina Basin area of the Northern Territory.
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