Discovery Africa (ASX: DAF) has executed a heads of agreement to acquire up to 100% of Consolidated African Resources (CARL), which holds Exploration Licence 1025 near Kitgum in Uganda that is prospective for graphite.
The graphite initiative provides a potentially prospective new chapter to Discovery Africa's valuation leveraging the interest in the graphite sector.
The area had undergone pitting, trenching and drilling of one borehole from a previous exploration exercise carried out by the Department of Geological Survey and Mines, resulting in the discovery of a graphite deposit in the Rom Mountain area.
The deposit was observed to have a north-northwest strike and stretched for 18 kilometres while being 1 kilometre wide with minimum overburden.
Discovery Africa drilled 28 exploration pits and graphite was highly visible along strike.
Heads of Agreement
The company has made a second payment of US$25,000 following the conclusion of the onsite due diligence phase and will acquire a 25% interest in CARL.
It has also committed to spending about US$264,000 to achieve JORC compliant certification on EL 1025.
Upon completion of Phase 2, the company will be issued a further 50% of CARL.
The remaining 25% can be purchased on an agreed fair market value.
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