U3O8 said the agreement pertained to a "non-core" 100-hectare area in the Carina property in Chubut province about 900 kilometres from the prospective Vaca Muerta shale. The property is ultimately likely to be sold for the purpose of frac sand, U308 said.

Argentina's emerging shale sector has seen major shortages of proppant including frac sands, with a dearth of local suppliers and cargoes sourced through a long and cumbersome rail-based supply chain from Brazil.

"TheCarina concession could be one of the closest known potential sourcesof frac sand to the Vaca Muerta basin in Argentina, which isconsidered one of the largest oil shale fields in the world and hasattracted significant investment from major oil companies in thelatter half of 2013," U308 chief executive Richard Spencer said in a statement.