The tightly held Askari Metals Ltd. has taken a significant step in its African growth strategy with the acquisition of the advanced-stage Nejo Gold Project in central-western Ethiopia.
The company has secured 100% of the issued capital of Xingxu Mining International Investment Co Ltd, a Hong Kong-based entity that owns the Nejo Project, through a binding share purchase agreement with Xingguang Group Ltd. The acquisition gives Askari full ownership of the 1,174-square-kilometre tenement on the underexplored but highly prospective Arabian-Nubian Shield, which is a highly prospective geological region known for its significant gold endowment, hosting large-scale multi-million-ounce discoveries across Egypt, Sudan, Eritrea, Ethiopia, Saudi Arabia and Yemen.
The Nejo Project is located in a globally significant gold and copper mineral province and lies within the same greenstone belt as the 3.4-million-ounce Kurmuk Mine (Allied Gold, TSX: AAUC), and adjacent to the 1.7-million-ounce Tulu Kapi Mine (Kefi Gold and Copper, LSE: KEFI).
Nejo hosts 10 proven gold targets and spans over 60 kilometres of strike along the Tulu Dimtu Shear Belt. Despite substantial historical exploration, including trenching, soil and rock sampling, and diamond and reverse-circulation drilling, no systematic exploration has been conducted to date.
Key historical results include:
- Dina: 7.1 metres at 30.3 grams per tonne (g/t) gold from 69.6 metres in a diamond drill hole, with no follow-up since 2011.
- Soyoma: 14.2 metres at 8.18 g/t gold in a trench, including 2 metres at 42.6 g/t gold, with no additional trenching or drilling.
- Guji: Multiple intercepts including 44 metres at 1.7 g/t gold (RC), and 10m @ 2.85g/t Au and 10.3m @ 2.23g/t Au, including 2.3m @ 6.24g/t Au and 10m @ 2.26g/t Au in diamond drill holes with visible gold observed.
Additional prospects include:
- Kobera: 5.8 metres at 8.0 g/t gold from a surface trench, with minimal trench testing and no follow-up drilling.
- Komto 1 & 2: 7 metres at 7.27 g/t gold from a surface trench with no subsequent exploration.
- Yubdo West: RC drilling returned 16 metres at 3.49 g/t gold including 5 metres at 5.8 g/t gold, and 8 metres at 1.21 g/t gold – with no follow-up work since 2013.
The project is prospective for both gold and high-grade copper mineralisation. A systematic confirmatory drilling campaign is being designed to underpin a potential JORC (2012) Mineral Resource Estimate. Data compilation is currently underway.
“This transformational acquisition represents an outstanding opportunity for the company to position ourselves at the forefront of one of Africa’s most exciting gold regions in the district of Ethiopia,” Askari executive director Gino D’Anna said.
“East Africa is fast becoming a world-renowned jurisdiction for the development of major mining operations including Perseus Mining’s Nyanzaga Gold Mine in Tanzania and the Meyas Sand Gold Project in Sudan.
“Nejo offers everything we look for in a flagship asset – scale, high-grade gold upside, proven mineralisation, and proximity to major gold operations on a globally significant greenstone belt.”
With this acquisition, Askari gains a well-advanced brownfields project with significant exploration upside in a Tier-1 geological setting.
Acquisition terms
The acquisition terms include an upfront payment of A$200,000 in cash, A$200,000 in Askari shares, and the issue of 20 million unlisted options exercisable at 6 cents over three years.
Under the terms of the Agreement, the acquisition comprises the following:
(a) Initial Consideration:
- A$200,000 in cash;
- A$200,000 in fully paid ordinary shares in the company; and
- 20 million unlisted options, each with an exercise price of A$0.06 and a three-year expiry.
(b) Deferred Consideration:
- A$200,000 in cash and A$200,000 in shares, subject to the achievement of specified JORC (2012) resource milestones;
- A further A$150,000 in cash and A$150,000 in shares, payable 12 months following completion of the Agreement.
(c) Royalty:
A 1% gross revenue royalty on all gold concentrates (or other products) produced and sold from the Project, capped at a total of A$7,000,000.
“This project not only surrounds KEFI’s 1.7-million-ounce Tulu Kapi Mine, but also hosts direct extensions of its mineralised system, giving us a compelling opportunity to potentially discover a major gold deposit in the same district,” D’Anna said.
“Historic results demonstrate outstanding gold grades over wide intercepts across multiple targets – and yet, much of the tenement remains underexplored. With a large-scale landholding, extensive historical data, and clear targets, we have the ingredients to fast-track Nejo toward a maiden JORC resource. This acquisition elevates Askari into a new growth phase, one where discovery and resource definition can drive significant value for shareholders.
“Ethiopia is fast emerging as a Tier-1 jurisdiction, and we are committed to building a strong, locally integrated presence in-country.
“We are excited to unlock the full potential of this project and deliver meaningful exploration milestones in the near term and emerge as a major African Gold Developer.”
