Deep Yellow Ltd. entered a deal with JOGMEC in which the latter can earn a 39.5% interest in the Nova joint venture, comprising exploration prospecting license 3669 and 3670, in Namibia.
The licenses cover about 600 square kilometers and adjoin Deep Yellow's wholly owned Reptile uranium project.
Under the terms, JOGMEC is required to spend A$4.5 million on exploration within a four-year period to earn the said interest in the venture, Deep Yellow said in a March 29 release.
Deep Yellow unit Reptile Mineral Resources and Exploration (Pty.) Ltd. holds a 65% interest in the venture, with Toro Energy Ltd. unit Nova Energy Africa (Pty.) Ltd. holding a 25% interest and Sixzone Investments (Pty.) Ltd. owning the remaining 10% stake.
Reptile Mineral will continue to act as manager of the Nova venture.
JOGMEC will not earn any equity unless it meets the full expenditure obligation.
The remaining joint venture participants will be free carried until this expenditure commitment is satisfied and thereafter will be required to contribute on a pro rata basis, excluding Sixzone whose share will be carried and paid back from future dividends.
After the completion of the earn-in period, the new equity distribution in the Nova venture will comprise JOGMEC with 39.5%, Reptile Mineral with 39.5%, Nova Africa with 15% and Sixzone with 6%.
Deep Yellow intends to immediately initiate a geophysical and geological field work program to delineate the uranium prospective zones within the Nova venture area, followed by a drill program later in the year.