Uranium developer Denison Mines is expanding its land position around the Wheeler River project in the Athabasca basin with an agreement to acquire initial interests in Skyharbour Resources’ Russell Lake uranium claim.

The two companies will subdivide the large Russell Lake property into four joint ventures: Wheeler North, Russell Lake, Wheeler River Inliers and Getty East. Denison will hold initial ownership stakes of 49%, 20%, 70% and 30%, respectively, and will have the option to earn up to 70% in both Wheeler North and Getty East.

The claims lie immediately east and north of Wheeler River, home to the high-grade Phoenix ISR development and the Gryphon deposit.

Denison CEO David Cates said on Monday that the deal strengthened the company’s regional pipeline at a pivotal time, as it moved closer to receiving final regulatory approvals for Phoenix.

“This transaction provides Denison with the opportunity to lead and participate in exploration efforts across four newly created joint ventures,” he said, adding that combining technical teams with Skyharbour is expected to accelerate evaluation of a highly prospective land package long regarded as a priority target for Denison.

Skyharbour CEO Jordan Trimble called the agreement “transformative” for his company, noting that Russell Lake contained multiple target areas that warrant being treated as separate projects. Skyharbour would remain operator on most claims while retaining exposure to Denison’s exploration success on others.

Denison will pay Skyharbour $18-million in total consideration, comprising an upfront $2-million cash payment and deferred consideration of $16-million in two tranches before year-end. The deferred payments may be settled in cash or Denison shares.

Once the transaction closes – expected on or before December – the four joint ventures will be formalised:

• Wheeler North: Denison 49%, Skyharbour 51%, with Denison holding an option to increase to 70% and become operator.
• Russell Lake: Denison 20%, Skyharbour 80%, with Denison funding its share of up to C$10-million in expenditures to maintain its interest. Skyharbour remains operator.
• Wheeler River Inliers: Denison 70%, Skyharbour 30%; Denison will operate.
• Getty East: Denison 30%, Skyharbour 70%, with an option for Denison to increase to 70% and assume operatorship.

Denison also gains priority access to Skyharbour’s existing Russell exploration camp, paying usage and administrative fees.