Uranium developer Denison options Saskatchewan lithium brine project

Uranium-focused Denison Mines (TSX: DML; NYSE: DNN) and lithium explorer Grounded Lithium (TSXV: GRD; US-OTC: GRDAF) have signed a deal that bets on low-cost extraction methods in Saskatchewan.

The agreement gives Denisonthe option to earn up to a 75% interest in Grounded’s Kindersley lithium brine project in western Saskatchewan, the companies said in a joint news release on Tuesday. Denison, focused on uranium further north in the Athabasca Basin will pay up to $15.1 million for the interest, in cash payments of up to $3.1 million. It will also fund project costs of up to $12 million through an earn-in option.

Grounded Lithium shares were up 33% at 10¢ apiece at mid-day in Toronto on the option deal, valuing the company at $7.6 million. Its shares have traded between 7¢ and 50¢ over the past year.

The cash is expected to offer more than enough funding for a field pilot at the Kindersley lithium project (KLP) that both companies plan to advance. Kindersley, located just north of the namesake town near the Alberta border, sits on top of the Leduc/Duperow formations that underlie the Prairie provinces.

"This is very significant for us in terms of helping us unlock the value of our project," Grounded CEO Gregg Smith told The Northern Miner in an interview. "Denison is also doing first-of-a-kind uranium mining in Saskatchewan, where they're doing in-situ extraction of uranium. That really reduces the cost. It's a very innovative approach to it and it will be first of its kind in Canada. It kind of goes to the heart of what their company is."