Skyharbour president and CEO Jordan Trimble said the project's location next to the company's Moore project was an attractive aspect.
"Uranium properties with the pedigree and perspectivity of Russell Lake are few and far between given the very strategic location, notable historical exploration and findings, as well as the numerous property-wide targets with the potential to generate new discoveries," he said.
The terms of the deal see Skyharbour with the option to acquire an initial 51% and up to 100% of the 73,294 hectare property. The 51% interest would require Skyharbour to pay C$508,200 (US$397,025) in cash, issue 3,584,014 common shares to Rio Tinto Exploration Canada, and fund $5.72 million in exploration on the project—inclusive of a 10% management free to Skyharbour, over a period of three years.
The second option is to earn an additional 19%, and further possible option to obtain the remaining 30%.
"We welcome Rio Tinto as a new strategic shareholder and project partner. We have a shared vision for the exploration of the various prospective target areas that remain to be fully tested on the property using modern exploration methods and techniques," Trimble said.
Skyharbour said while there has been historical exploration carried out at Russell Lake, most of it happened before 2010.
"The property has been the subject of over 95,000 metres of drilling in over 230 drill holes. The property's claims are in good standing for 2-22 years with assessment credits built-up from previous programmes," Skyharbour said.
"Several notable exploration targets exist on the property including the Grayling Zone, the M-Zone Extension target, the Little Man Lake target, the Cristie Lake target, and the Fox Lake Trail target. More than 35 kilometres of largely untested prospective conductors in areas of low magnetic intensity exist on the property as well," it said.
Haywood Securities analyst Colin Healey described the historic exploration on the project as "significant" and provides Skyharour with an "excellent" dataset to direct future exploration.
Skyharbour's portfolio is centred around uranium exploration projects in the Athabasca with a total of fiteen projects, ten of which are drill-ready, it says.
"Its' acquisition would add another drill ready, advanced-stage uranium exploration asset to Skyharbour's project portfolio and offers significant operational and exploration synergies with the adjacent Moore uranium project," Healey said.
Skyharbour's share price rose 8% day on day to C$0.45, giving the company a market capitalization of C$59.54 million.