U3O8 Corp., a Canadian-based company focused on exploration and development of uranium resources and associated commodities in South America, has vended its 100 percent interest in the Carina property in Chubut Province, Argentina to South American Rare Earth Corp. (SAREC), a private investee company of U3O8 Corp.
As consideration for Carina, U3O8 Corp. will increase its ownership in SAREC from 13 percent to 39 percent as well as retaining a 7.5 percent net smelter royalty on frac sand production from the property. The Carina concession is prospective for frac sand for potential use in the extraction of oil and gas from shale.
“The spin out of Carina provides an opportunity to maximize value from this property by placing it in a company that is focused on frac sand, rather than holding it as a non-core asset in U3O8 Corp.,” said Dr. Richard Spencer, U3O8 Corp's president and CEO. “The frac sand potential at Carina is within trucking distance of the Vaca Muerta basin, which is estimated to contain the world's third largest shale oil and gas resource and represents a large, emerging market for domestic frac sand supply in Argentina. Currently, most of the country's frac sand is imported from Brazil, China and the United States. A joint venture with a local operator on the Carina property is advancing towards production at no cost to us, and could generate modest cash flow in the near-term. U3O8 Corp’s immediate priority remains on the completion of the preliminary economic assessment on the Laguna Salada uranium deposit, which has taken longer than anticipated due to additional test work having been required on one component of the uranium-vanadium extraction process. We expect to announce results of the PEA imminently.”