Great Western Minerals has the option to acquire a 51-percent interest in the Misty project near Lac Brochet in northwestern Manitoba. The company must pay C$100,000 in cash and issue 200,000 shares to CanAlaska Uranium Ltd, and it must spend C$6m on exploration over a six-year period. During the first four years, Great Western’s spending requirement is just C$0.45m, with C$2.55m due to be spent in year-five and C$3.0m in the final year of the option agreement.
Earlier this year, CanAlaska reported rare earth element (REE) mineralisation was present on the property, with assays of up to 10.4 percent REE from samples collected during a reconnaissance programme. Most of the samples of interest came from an area approximately one kilometre square.
Objective's view:
The Misty project offers Great Western another intriguing rare earth project, but we expect the company will continue to focus the majority of its resources on the Hoidas Lake project in Saskatchewan, and on the Deep Sands prospect in Utah, USA. Therefore, we currently value the Misty project at a nominal book value, based on the company’s cost to acquire the option, supporting our core valuation for Great Western of C$0.35 per share. Nevertheless, the project does have the potential to increase rapidly in priority, given its potential for extremely high grades of rare earth elements.
