Askari Metals Broadens African Focus with Acquisition of Advanced Nejo Gold Project

Askari Metals (ASX: AS2) has added to its African portfolio with the acquisition of Hong Kong-based Xingxu Mining International Investment Co and its advanced Nejo gold project in central-western Ethiopia.

The deal provides Askari with exposure to a brownfields gold project with large-scale resource potential in the highly prospective Arabian-Nubian Shield (ANS), which hosts multi-million-ounce discoveries across Egypt, Sudan, Eritrea, Ethiopia, Saudi Arabia and Yemen.

The Nejo acquisition complements Askari’s move in April to acquire Rift Valley Metals, which owns prospective gold assets within the underexplored southern segment of the ANS that includes the Sakaro, Sakaro West, Lega Dembi South, Megado and Wayu Boda projects.

Project Consideration

Initial consideration will be in the form of $200,000 cash and $200,000 worth of Askari shares to Xingxu Mining, plus 20 million unlisted options with an exercise price of $0.06 and a three-year expiry.

Deferred consideration will see Askari pay $150,000 cash and $150,000 in shares within the first 12 months following the acquisition, plus a further $200,000 in cash and $200,000 in shares on the announcement of a maiden resource estimate.

Askari will also pay Xingxu Mining a 1% gross revenue royalty (to a maximum $7 million) from all gold concentrates produced and sold from the Nejo project.

‘Outstanding Opportunity’

Askari executive director Gino D’Anna said the Nejo acquisition would allow the company to expand its African focus.

“This transformational acquisition represents an outstanding opportunity to position ourselves at the forefront of one of Africa’s most exciting gold regions, with a flagship asset that has scale, high-grade gold upside, proven mineralisation and proximity to major gold operations,” he said.

“We are excited to hit the ground running and fast-track our pathway to a resource estimate through systematic drilling and exploration in areas where only limited exploration has been completed.”

Prolific Location

The Nejo project comprises three contiguous exploration licences across 1,174 square kilometres of the same prolific Greenstone Belt that houses Allied Gold’s 3.4 million ounce Kurmuk mine, which has a targeted gold production rate of 290,000ozpa.

Nejo also hosts mineralised extensions of the high-grade 1.7Moz Tulu Kapi project owned by Kefi Gold + Copper, which has been subject to extensive historic exploration including mapping, geophysics, geochemical sampling, remote sensing, trenching and drilling.

Askari has planned confirmatory diamond and reverse circulation drilling, as well as rock chip sampling, trenching and mapping to validate Nejo’s historic results and provide a pathway to near-term potential.