Havilah Resources signs MOU for exploration and potential development of its uranium interests

Havilah Resources Ltd (ASX:HAV) (FRA:FWL) has entered into a binding memorandum of understanding (MOU) for the exploration and potential development of its uranium interests in South Australia, with Aroha Resources Pty Ltd - conditional upon Aroha listing on the ASX.  The MOU provides for the parties to progress in good faith on an exclusive basis and will enable Aroha to secure initial seed capital via an Information Memorandum ahead of an initial public offering (IPO).  Havilah anticipates it will hold a 25% interest in Aroha at the time of the proposed ASX listing, subject to details of the capital raising, and will also be entitled to future uranium royalties.  “Progressing non-core prospects” Havilah technical director Dr Chris Giles said: “We are delighted that Aroha is intending to fund and advance Havilah’s extensive uranium interests, which were acquired via the takeover of Curnamona Energy Limited during 2012. “This MOU is consistent with Havilah’s stated strategy of maximising the value of its significant pipeline of exploration projects in South Australia, while focusing the company’s main efforts on advancing its core projects with near-term potential for significant value uplift for shareholders. “It also achieves Havilah’s objective of progressing its non-core prospects and projects in a prudent manner, with external funding and leaves Havilah shareholders with a fair residual benefit in the event of success. “Aroha’s team is well experienced and highly successful in the Australian resources industry and we look forward to working with them.” MOU terms Subject to Aroha listing on the ASX via an IPO, Aroha would secure the exclusive uranium exploration and mining rights for sediment-hosted uranium deposits within specified Havilah exploration licences. Havilah would maintain an interest in the venture via: An anticipated holding of 25% of the fully diluted issued share capital of Aroha at the time of the IPO, subject to details of the Aroha capital raising to be finalised; Payment to Havilah of $500,000 from Aroha IPO proceeds within one month of Aroha listing on the ASX, subject also to details of the Aroha capital raising to be finalised; and A 1.5% net smelter return royalty on all Aroha uranium sales revenue from within specified Havilah exploration licences (less certain deductions) after the first $10 million of cumulative uranium sales revenue. The MOU will lapse if the IPO does not proceed within 12 months. Additional terms include: A formal tenement access agreement will govern details of the uranium rights as they relate to the exploration licences and any subsequent MLs and MPLs over any uranium deposits to be developed, subject to any required government approvals; Havilah has agreed to make available its share register for Aroha to present the IPO to Havilah shareholders (the company will not seek Aroha Board representation);   Aroha would be required to spend at least the statutory minimum expenditure commitment annually for each Havilah exploration licence covered by the MOU; Aroha would be required to pay Havilah half of the total exploration licence rental and renewal costs commencing no later than three months after the MOU date; Havilah would retain 100% legal and beneficial ownership of its exploration licences and will have no restriction on its current activities, excepting exploration for sediment-hosted uranium deposits; and Havilah shareholder approval will not be sought because the company’s uranium interests have previously been written down to zero asset value, and are not considered to be a material asset, according to the ASX Listing Rules. Havilah’s exploration licence area covered by the MOU uranium rights (green boundary), except EL 5966, which lies to the north of Lake Frome Assets ‘economic potential  Many of Havilah’s exploration licences north of the Barrier Highway are highly prospective for Tertiary palaeochannel-hosted uranium deposits similar to the nearby Boss Energy Ltd’s (ASX:BOE) (OTCMKTS:BQSSF) Honeymoon uranium project, which is being readied for production. Curnamona Energy (a 100%-owned subsidiary of Havilah after its takeover during 2012) identified numerous potentially economic grade uranium intersections in its extensive drilling campaigns across the region and delineated the 4.6 million pound eU3O8 Oban JORC inferred resource. New techniques and processes over the last decade, especially advancements in the use of resins, give the company considerable cause for optimism that Oban and similar prospects within exploration licences covered by the MOU can be economically exploited, along with the ongoing improvement in uranium market sentiment.