GoviEx Uranium (TSXV: GXU; US-OTC: GVXXF) is selling its uranium-silver-copper Falea project in Mali to African Energy Metals (TSXV: CUCO; US-OTC: NDENF) in a $5.5 million cash and share deal.
The project is about 350 km west of Mali's capital Bamako and roughly 240 km south of the city of Kayes. It is also about 80 km to the east of Areva's Saraya East uranium deposit in Senegal and approximately 13 km along trend from Iamgold's (TSX: IMG; NYSE: IAG) Siribaya gold deposit.
Under the agreement, GoviEx will sell all of its outstanding shares in the project and will receive $2 million worth of African Energy Metals and a 3% net smelter return royalty. If the Falea licence is renewed, African Energy will issue GoviEx additional shares worth $3 million.
GoviEx will be able to nominate a director to African Energy's board if its shares in the company exceed 10%.
"GoviEx will become an important shareholder of African Energy Metals and our shareholders will have the continuing benefit of their knowledge and mining expertise," Stephen Bartley, African Energy's executive chairman, stated in a press release. "Less than 5% of the property has been explored, so there is substantial exploration upside for uranium, copper, silver, and gold."
For its part, GoviEx, which acquired Falea from Denison Mines (TSX: DML; NYSE-AM: DNN) in June 2016, noted that the deal gives its shareholders continued exposure to Falea and will enable it to focus on exploration and development at is Madaouela and Mutanga uranium projects in Niger.
GoviEx describes Falea as an uncomformity-associated uranium deposit and says it occurs at or just above the uncomformity between the Birimian and overlying sedimentary sequences, within the Kania Sandstone as well as the underlying basal conglomerate.
According to a 2015 resource estimate, Falea contains indicated resources of 6.9 million tonnes grading 0.1% U308, 0.2% copper, and 72.8 grams silver per tonne for 17.4 million lb. U308, 24.4 million lb. copper and 16.1 million oz. silver. Inferred resources add 8. 8 million tonnes grading 0.069% U308, 0.20% copper and 17.3 grams silver per tonne for 13.4 million lb. contained U308, 38.7 million lb. copper and 4.9 million oz. silver.