The Sage uranium deposit is believed to have vanadium grades of up to 1.5%, among the highest in the world.
Average vanadium oxide prices rose to about US$13.60/lb in the first quarter of this year, up 164% year-on-year.
Sage, which previously produced in 1990, features 94 unpatented mining claims.
A 2011 technical report put historic resource estimates of about 4.8 million pounds of vanadium at an average grade of 1.72%, and about 580,000lb of uranium at an average 0.21% - a ratio of about 8:1 vanadium to uranium. The report also disclosed ultra-high vanadium grades in the deposit at 1.67%, 2.54%, and 1.8%, respectively, for the formerly classified measured, indicated, and inferred resources.
Under the agreement, BMR will underwrite the cost of scoping, engineering and technical studies during a due diligence period, to prepare for pre-production work. It will then have the option to enter a definitive JV accord that will trigger an additional buy-in payment to Western. Thereafter BMR and Western will divide JV expenditures 50-50, and divide vanadium offtake 65-35 and uranium offtake 10-90.
The higher percentage of vanadium offtake for BMR aligns with its rechargeable battery and energy storage mandate and the deal structure compensates Western for the differential in the offtake percentage.
The agreement also gives BMR a further period to exercise a short-term option to buy the entire Sage project outright. BMR also retains the right to pull the plug after its due diligence.
The parties hope to close the deal by August 10.