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Blue Sky Uranium (TSX-V: BSK)(OTC: BKUCF) CEO Niko Cacos on Transformational Deal Taking Ivana Through Production
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Blue Sky Uranium, Mr. Niko Cacos. Niko, it is great to have you back on. How are you today, sir?
Niko Cacos: I'm doing very well and it's always a pleasure to be on your program, Gerardo.
Gerardo Del Real: Thank you so much. Listen, we talked a bit off-air, and I was asking you about what it's been like to see the difference and the transformation doing business in Argentina. And you said it best, you said it off-air, but what you said was you feel like companies in Argentina used to get the Argentina discount, and now there's an Argentina premium. It's got to be something to see that turnaround in such a short amount of time.
Niko Cacos: It is amazing. It is amazing. The new government that has taken over almost about a year ago now has really transformed the country's economics tremendously. They've slain inflation. And just a couple days ago, the President Milei gave a speech to the nation basically outlining not just short-term economic changes that are coming, but medium-term and long-term ones, really talking like a real leader, really pushing to tap into the mining industry, the energy industry, and in particular, the nuclear industry. They announced a new nuclear energy program, and Argentina is starting to build more new nuclear power plants again.
Gerardo Del Real: Well, it seems like an absolute perfect time to announce the definitive earn-in agreement to advance the Ivana uranium deposit through feasibility, and not only that, but then to commercial production.
Heck of a deal. I love the way it's structured. It really, really minimizes dilution all the way to the production phase. Can you speak about the structure of the deal and maybe some of the highlights there?
Niko Cacos: Absolutely. I mean, our Ivana deposit is at 17 million pounds of uranium 8 million pounds of vanadium. It's already the most advanced and largest uranium deposit in Argentina with lots more upside there.
But this deal is really an exceptional deal for Blue Sky and our shareholders, because it basically paves the path to advance this deposit, get it through a feasibility study, and then through commercial production without Blue Sky having to put up any money. So it's a carried interest.
So our partner, one of the most capable and prominent business groups in Argentina, Corporation America, will earn up to 80% interest in the project, and Blue Sky will get a carry 20% interest, and we don't have to worry about contributing capital costs or anything like that. So it really is a very, very good deal for Blue Sky.
Gerardo Del Real: Retaining 20% all the way through the production phase has to be satisfying, knowing the work that you did to advance the project and get it to this point?
Niko Cacos: Absolutely it is, because up to this point there's been a lot of talent and expertise with our exploration team. But from here going forward, this is where some of the heavy lifting and some of the most expensive phases of the project development begin to kick in. And for us not having to contribute to that, I see it as a great way to preserve and retain exceptional value and generate really exceptional value for our company and our shareholders.
Gerardo Del Real: So you're retaining the 20%, but there's other really highly prospective properties in the portfolio. Can we speak to those and how you plan on prioritizing those moving forward?
Niko Cacos: Yes. Well, we'll have the joint venture with the deposit, and that goes through various stages. And the joint venture, if I could just back up a little bit, to get us the feasibility study, they need to spend $35 million US over three years. And then afterwards, when the decision is made to go forward in production, they're responsible to spend up to $160 million. And if it goes higher than that, they will organize the financing. That will come out of the joint venture, not out of Blue Sky.
And what we also did is there's an area of interest that surrounds the deposit where we currently have five or six exploration targets that we thought were compelling. These are targets that could add significant more value to the deposits if they're going into production, this would increase the value there.
What we did is we've given them six years, they pay for the exploration. We discover something that's worth bringing into the joint venture, we have already pre-structured a table that outlines what the price is to bring that in. So that's an additional way for Blue Sky to monetize some of its early stage exploration targets. And still, we retain the balance of the Amarillo Grande uranium-vanadium district and our other projects that we've got in Argentina.
Gerardo Del Real: That's a whole heck of a lot of upside with a company that has a tiny market cap, given just the value of the 20% on Ivana, right? And so to have that and the portfolio that you've put together, I got to believe you're excited for 2025?
Niko Cacos: Very much so, because I think with this deal now, now that we are looking towards becoming a developer, I think it'll change the kind of investment, investor that we will be able to attract for our company, which in turn of course will change the valuation of the company. So I'm looking for that to change and with a very, very positive outlook on uranium for next year and beyond. Like you said it earlier, it looks like the stars have aligned for us.
Gerardo Del Real: It's great timing. I hope you have a great end to your 2024, and I know we're both really excited about 2025. Thank you for making time, Niko.
Niko Cacos: Always a pleasure.
Gerardo Del Real: Cheers now. Chat soon.
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