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FORTUNE BAY ANNOUNCES OPTION AGREEMENT FOR THE MURMAC AND STRIKE URANIUM PROJECTS

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FORTUNE BAY ANNOUNCES OPTION AGREEMENT FOR THE MURMAC AND STRIKE URANIUM PROJECTS

 

 

 

 

 

Fortune Bay Corp. (TSX-V: FOR) (FWB: 5QN) (OTCQX: FTBYF) is pleased to announce that it has entered into a definitive option agreement, dated December 15, 2023, with 1443904 B.C. Ltd. an arms-length private company. Pursuant to the Agreement, the Optionee will be granted the right to acquire up to a 70% interest in the Company’s wholly owned Murmac and Strike Uranium Projects over a three-and-a-half-year period by funding C$6 million in exploration expenditures, making cash payments totalling C$1.35 million, and issuing C$2.15 million in common shares following completion of a going public transaction.

 

The Projects include mineral claims totalling 19,877 hectares located along the northwestern margin of the Athabasca Basin, near Uranium City, Saskatchewan, in the prolific Beaverlodge mining district where approximately 70 million pounds of U3O8 was produced between 1950 and 1982 (see Figure 1). The Projects have potential for high-grade, basement-hosted uranium deposits in a geological setting similar to other major discoveries on the Basin margin. This potential has been confirmed through initial drilling by Fortune Bay in 2022 which intersected favorable geology, alteration, geochemistry, and uranium mineralization. For further details please see News Releases dated December 7, 2022 and  December 13, 2022. The Projects host approximately 63 kilometres of prospective electromagnetic conductor packages which were not systematically targeted and drill tested during historical exploration efforts, which predominantly targeted Beaverlodge-style mineralization. A significant number of historical high-grade (>1% U3O8) uranium showings occur within the Projects, in addition to historical small-scale uranium mining at the Tena prospect.

 

Key Terms of the Agreement

 

Pursuant to the terms of the Agreement, the Optionee shall have the right to earn up to a seventy (70%) percent interest in the Projects in consideration for a series of cash payments, the issuance of common shares following completion of a going public transaction, and incurring certain exploration expenditures, as follows:

 

 

Cash (C$) Consideration
Shares (C$)
Exploration
Expenditures (C$)
Interest Earned
Signing of the Agreement

(the “Execution Date“)

$200,000(1) $200,000(2) Nil
12 month anniversary

of Execution Date

$200,000 $200,000(3) $1,000,000
24 month anniversary

of Execution Date

$250,000 $250,000(3) $2,000,000
Total (First Option) $650,000 $650,000 $3,000,000 51 %
36 month anniversary

of Execution Date

$300,000 $300,000(3) $3,000,000
Total (Second Option) $300,000 $300,000 $3,000,000 60 %
42 month anniversary

of Execution Date

$400,000 $1,200,000(3) Nil
Total (Third Option) $400,000 $1,200,000 Nil 70 %
Grand Total $1,350,000 $2,150,000 $6,000,000
Notes:
(1) Payable to the Company immediately upon the entering into the Agreement.
(2) Issuable to the Company upon completion of a going public transaction, at the transaction price for the going public transaction. The price at which the Consideration Shares are issued being referred to as the “Transaction Price”.
(3) Issuable at the Transaction Price.

 

The Company will act as the operator during the option period and will be entitled to charge a management fee of 10% of expenditures incurred on the Projects.

 

A participating Joint Venture will be formed at the end of the option period, consistent with customary JV Terms, as defined in the Agreement, with mutual intent to negotiate and execute a definitive JV agreement. The JV will allow for dilution and should the Company’s interest fall below 10% the Company will be granted (i) a 1% net smelter returns (“NSR”) royalty on the Murmac Property (the “1% Royalty”), and (ii) a 2% NSR royalty on the Strike Property. One-half (0.5%) percent of the 1% Royalty may be repurchased at any time prior to commercial production for a cash payment of C$1.5 million.

 

During exploration programs, the Projects will benefit from use of the Company’s camp and facilities located in Uranium City upon commercially reasonable terms.

 

Historical Results

 

Further details regarding the historical uranium occurrences noted in this news release can be found within the Saskatchewan Mineral Deposit Index. Fortune Bay has verified the majority of these occurrences through field prospecting and sampling, however there is a risk that any future confirmation work and exploration may produce results that substantially differ from the unverified historical results. The Company considers these unverified historical results relevant to assess the mineralization and economic potential of the property. The Company also cautions that past results, discoveries and production on proximate land are not necessarily indicative of the results that may be achieved on the subject properties.

 

Qualified Person

 

The technical and scientific information in this news release has been reviewed and approved by Gareth Garlick, P.Geo., Technical Director of the Company, who is a Qualified Person as defined by NI 43-101. Mr. Garlick is an employee of Fortune Bay and is not independent of the Company under NI 43-101.

 

About Fortune Bay

 

Fortune Bay Corp. is an exploration and development company with 100% ownership in two advanced gold exploration projects in Canada, Saskatchewan (Goldfields Project) and Mexico, Chiapas (Ixhuatán Project), both with exploration and development potential. The Company is also advancing the 100% owned Strike and Murmac uranium exploration projects, located near the Goldfields Project, which have high-grade potential typical of the Athabasca Basin. The Company has a goal of building a mid-tier exploration and development Company through the advancement of its existing projects and the strategic acquisition of new projects to create a pipeline of growth opportunities. The Company’s corporate strategy is driven by a Board and Management team with a proven track record of discovery, project development and value creation.

 

 


Figure 1: Location of the Murmac and Strike Uranium Projects. (CNW Group/Fortune Bay Corp.)

 

Posted December 18, 2023

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