GoviEx Uranium Inc (TSX-V:GXU, OTCQX:GVXXF) told investors it has entered into a deal to sell its Malian subsidiary Delta Exploration Mali SARL to African Energy Metals Inc for C$5.5 million in cash and shares, as well as a net smelter royalty.
The company noted that Delta holds three contiguous exploration licences in Mali - Falea, Bala, and Madini - known collectively as the Falea project. The sale is part of its strategy of focusing on its two advanced mine-permitted projects, Madaouela in Niger and Muntanga in Zambia. While the Falea project will be managed by AEM, GoviEx will retain a considerable interest in the project, therefore maintaining a potential upside on any future discoveries.
"This is a strategic deal which will allow GoviEx shareholders to maintain a significant interest in the Falea project whilst allowing the company to concentrate its efforts on the continued exploration and development of its two mine-permitted, advanced-stage development uranium projects, Madaouela and Muntanga,” GoviEx CEO Daniel Major said in a statement. “Falea is a solid project with fantastic exploration potential and African Energy Metals is well placed to manage its development going forward, with in-country knowledge and experience."
READ: GoviEx Uranium announces positive results from 2022 drilling program at Falea Project in Mali
Under the terms of the agreement, AEM will make a cash payment of C$500,000 and issue GoviEx with AEM common shares worth C$2,000,000. Subject to the re-issuance of the Falea license, it will issue the company additional stock equal to the value of C$3,000,000. AEM will also grant GoviEx a 3% net smelter royalty on the Falea project.
"We are excited to become involved in the Falea project. It is a polymetallic project with a significant uranium resource,” African Energy Metals executive chairman Stephen Barley said. “GoviEx will become an important shareholder of African Energy Metals and our shareholders will have the continuing benefit of their knowledge and mining expertise. Less than 5% of the property has been explored, so there is substantial exploration upside for uranium, copper, gold, and silver.”
For so long as GoviEx holds at least 10% of the issued and outstanding common shares of AEM, the company said it will have the right to appoint one director to AEM's board of directors.
The transaction is expected to close on or before March 15, 2023, and remains subject to several conditions, including but not limited to approval of the TSXV.
GoviEx is a mineral resource company focused on the exploration and development of uranium properties in Africa. The company’s principal objective is to become a significant uranium producer through the continued exploration and development of its flagship mine-permitted Madaouela project in Niger, its mine-permitted Mutanga project in Zambia, and the Falea project in Mali.
Contact the author at stephen.gunnion@proactiveinvestors.com