ALX Uranium (AL.V) announced today it has entered into a definitive agreement with Denison Mines (DML.TO, DNN) to sell 80% of its Hook-Carter property for 7.5 million shares of Denison. Denison will also fund the first C$12M in exploration expenditures on the property (which means ALX doesn’t have to contribute its C$2.4M share).
This seems to be a good deal as ALX received approximately its entire market cap worth of stock in Denison allowing it to gain exposure to more and more advanced uranium exploration and development projects in the region. On top of that, Denison is required to spend C$3M on the property in the first three years to avoid being diluted from 80% to 75% again. As ALX Uranium will be the operator on the project, the company will very likely also receive a management fee, which should help to keep the cash burn relatively low.