Uranium Resources, through its subsidiary URI, has signed an exploration agreement with Cameco Texas.

The deal provides for a three-phase, three-year exploration program on a large South Texas property on which URI obtained the previously announced exploration rights and lease option.

Cameco will fund the majority of the exploration costs, and at the conclusion of the exploration program, the parties may sign an operating JV to develop and produce any discovered uranium resources and reserves.

The uranium will be processed at URI’s Kingsville Dome or Rosita processing facility, with Cameco’s share of production being processed under a toll processing agreement with URI.

The initial area targeted for exploration, which will be known as the Los Finados Project, consists of three priority parcels located within the 53,500-acre property in Kenedy County in the US state of Texas.

Under the exploration agreement, Cameco can earn up to a 70% interest in the property for a $3.5m investment in exploration and development expenses over the three-phase project.

During the first and second phases, URI and Cameco will have joint decision-making authority and URI will serve as the exploration operator to execute the jointly-designed exploration program.

URI has the right of first refusal for a five-year period to participate with Cameco in future property acquisitions in South Texas.

In addition, both parties have first right of refusal should the other wish to convey their interests under the exploration agreement.