ENRG Elements to divest 90% of non-core Ghanzi West copper-silver project

ENRG Elements (ASX: EEL) has confirmed it will divest 90% of its Ghanzi West copper-silver project in Botswana to UK-based Kavango Resources Plc.

The project comprises six prospecting licences across 2630 square kilometres of the emerging world-class Kalahari copper belt.

It is believed to be one of the most prospective copper belts worldwide and hosts Sandfire Resources’ (ASX: SFR) Motheo copper mine and Khoemacau Copper Mining’s Zone 5 underground mine.

Terms of the deal

Under the terms of the deal, Kavango will purchase 90% of the issued capital of ENRG subsidiaries Icon Trading Company and Ashmead Holdings for a total cash consideration of $2.5 million.

Funds will be allocated on a staged basis with $1.5 million paid on completion of the sale; an additional $500,000 paid 90 days post-completion; and a final $500,000 paid at the 180-day mark.

ENRG’s remaining 10% interest in Icon and Ashmead will be free carried until three years after completion or once a decision to mine is made.

Well-timed divestment

ENRG managing director Caroline Keats said the Ghanzi West divestment was well-timed.

“Proceeds from the sale of Ghanzi West will enable us to advance our strategic objectives, which includes progressing the Agadez and Tarouadji projects once the current political uncertainty in Niger has abated,” she said.

“This non-dilutive injection of capital comes at a time when the uranium sector is experiencing decade-high prices and the demand for critical minerals continues to surge.”

Niger projects

The Ghanzi West divestment is believed to align with ENRG’s strategy to monetise its non-core assets and fund the advancement of the under-explored Agadez (uranium) and Tarouadji (lithium) projects.

Niger has one of the world’s largest uranium reserves and in 2021, became the seventh-highest uranium producer globally, with the region’s Tim Mersoï Basin hosting Africa’s highest-grade and tonnage uranium ores.

Resource estimate

In April, ENRG announced a resource estimate for the Takardeit deposit within Agadez of 31.1 million tonnes grading 315 parts per million uranium oxide for 21.5 million pounds inferred.

The figures came after a 5500 metre drilling and surface sampling program in June to confirm and extend mineralisation previously delineated within the deposit’s Jurassic formations.

Tarouadji tenements

In July, ENRG was granted the Tarouadji project tenements covering historic lithium and tin anomalies and located 70 kilometres east of Agadez.

The project covers 499.7sqkm and will be explored using a staged approach to unlocking new resources.