Askari Metals expands African focus with acquisition of highly-prospective Ethiopian gold portfolio

Askari Metals (ASX: AS2) is set to expand its African exploration focus with the acquisition of private company Rift Valley Metals, which owns a portfolio of five highly prospective gold projects in southern Ethiopia’s Adola Greenstone Belt.

The deal will give Askari exposure to 460 square kilometres of new acreage across the Sakaro, Sakaro West, Lega Dembi South, Megado and Wayu Boda projects, located approximately 350km south of Addis Ababa.

The company will gain a first-mover advantage into a prolific, underexplored gold-copper belt known for hosting large-scale, multi-million-ounce discoveries across Egypt, Sudan, Eritrea, Ethiopia, Saudi Arabia and Yemen.

Acquisition consideration

Askari will pay Rift Valley a consideration of $200,000 cash plus $200,000 worth of Askari shares for the projects, to be held in voluntary escrow for 12 months from the date of issue.

A deferred cash and shares consideration of $100,000 will be payable once Askari announces 40 rock chip samples grading a minimum of 3 grams per tonne through to 10g/t gold.

A second deferred cash and shares consideration of $100,000 will be payable on the announcement of 10 trench samples assaying more than 10m at 3g/t gold.

Askari will make a $150,000 payment to Rift on the 12-month anniversary of the acquisition and will grant the company a 1% net smelter royalty on the exploration licences, retaining the right to buy back the royalty in full for $1 million.

Discovery potential

Askari founding director and major shareholder Gino D’Anna said the company was keen to advance the “exceptionally high” discovery potential of the Ethiopian projects.

“This acquisition represents an opportunity for us to make a significant discovery and implement the necessary infrastructure to assemble a Tier-1 gold portfolio in this part of the world,” he said.

“Ethiopia hosts some of the world’s largest gold deposits and with a record high gold price edging above US$3,340 per ounce, we believe it is a great time to expand our gold focus to include Africa where our strength and experience will give us a strategic advantage.”

Best-in-class jurisdiction

The country presents as an ideal investment jurisdiction for Askari.

“Ethiopia is considered best-in-class, with a government focused on stimulating the mining and natural resources industry and attracting foreign investment,” Mr D’Anna said.

“This approach, combined with a robust and clear mining and minerals regulatory framework, has attracted major investments to date from market-leading miners including Newmont, Rio Tinto (ASX: RIO) and BHP Group (ASX: BHP).”

Askari’s strategic and low-cost exploration approach will commence with a high-resolution remote sensing study and field reconnaissance work to identify and advance high-potential drill targets at the new projects.

Project locations

The Sakaro and Lega Dembi South projects are located up to 6km south on strike of the historic Lega Dembi and Sakaro gold mines and 65km on trend north of the 17.7-million-ounce Dawa Okote deposit.

Lega Dembi has historically produced more than 2Moz of gold and has a current in situ resource of 2.5Moz, while Sakaro has a resource in excess of 600,000oz grading more than 14g/t gold.

The Megado project is centrally located on the Adola Greenstone Belt, in the heart of the mineralised corridor between Sakaro and Lega Dembi located 24km to the north and Dawa Okote, located 34km to the south.

The Adola belt sits within the prolific Arabian-Nubian Shield, which spans over 2.7 million square kilometres and hosts a number of significant volcanogenic massive sulphide (VMS) and orogenic gold deposits and porphyry copper-gold systems.

High-grade metamorphic rocks

Sakaro West sits to the west of Sakaro and Lega Dembi South, with its eastern portion dominated by high-grade metamorphic rocks, primarily foliated gneisses and migmatites.

The company believes the western portion of Sakaro West and the Wayu Boda project is dominated by pre- to syn-tectonic granitoid complexes, including medium- to coarse-grained granites, granodiorites and tonalites.

Historic exploration by former owner Alecto Minerals nearby to Wayu Boda returned rock chip grades of up to 47g/t gold and trench results of 14m at 0.4g/t gold, including 3.6m at 1.5g/t, 1.3m at 4.9g/t and 2m at 1.1g/t.

Board re-appointment

Mr D’Anna was re-appointed to the Askari board in April as an executive director to drive the company’s growth through acquisitions.

He brings to the role more than 15 years’ management and advisory experience in the junior mining sector and has had significant exposure to primary and secondary capital markets, resource exploration, public company operations, administration and financial management.

Mr D’Anna will be responsible for executing Askari’s ambition of becoming a highly disciplined African explorer and developer.

Strategic experience

Askari chair Robert Downey said Mr D’Anna’s strategic experience would benefit the company as it continues to evaluate additional project opportunities across Africa to complement its existing portfolio.

“We have been reviewing a number of highly prospective and advanced projects where our strength and experience will allow us to leverage a first-mover advantage,” he said.

“We are currently in a transitional phase, from which we expect to emerge with a clear directive and focus.”

Askari has also appointed CPS Capital Group as a strategic capital markets advisor to engage with new and existing investors and shareholders and advance the company’s African exploration strategy.