Askari paves way to secure gold-rich foothold in Ethiopia

Askari Metals has wrapped up due diligence and is moving forward to buy 460 square kilometres of prime exploration ground near multi-million-ounce gold mines in Ethiopia’s famed Adola greenstone belt.

When the deal is sealed, Askari will walk away with a prime piece of gold real estate by unlocking a strategic foothold in the southern Arabian-Nubian Shield - a geological hot spot hosting some of the world’s largest undeveloped gold and copper deposits.

Under the terms of the acquisition, the company has agreed to take over 100 per cent of Rift Valley Metals, the current owners of the exploration grounds in exchange for $200,000 in cash and $200,000 in Askari shares, issued at the share price on the day of completion. Those shares will be held in voluntary escrow for 12 months.

Two further milestone payments totalling $200,000 in cash and shares will be doled out based on the company picking up multiple rock chip samples of at least 3 grams per tonne (g/t) and 10 samples of more than 10g/t, together with a trench result of 10m grading 3g/t or more. A final payment of $150,000 in cash will be handed over 12 months after completion.

What makes this deal shine is its proximity to tier-1 gold mines. Askari’s five freshly acquired tenements - Sakaro, Sakaro West, Lega Dembi South, Megado and Wayu Boda - are parked right next door to Ethiopia’s only two operating gold mines, Lega Dembi and Sakaro, which have already coughed up multi-million ounces between them.

The Lega Dembi mine has produced 2.5 million ounces and still holds a current resource of 2.5M ounces, while Sakaro has more than 600,000 ounces at a blistering grade above 14g/t gold. The company’s Megado tenement, which sits a little further to the south, is only 30 kilometres north of the 17.7M-ounce Dawa-Okote gold project.

The move towards gold in Africa marks a new direction for Askari, which has lithium and uranium plays in Namibia and Tanzania that are already showing promise. However, with gold prices toying with all-time highs, the yellow metal appears to be taking centre stage.

Our onsite due diligence identified several significant large-scale artisanal mine workings along this highly prospective greenstone gold belt underpinning our belief that with modern exploration, the full potential and value of these areas can be unlocked. For Askari, this acquisition represents an opportunity for the company to make a significant discovery and implement the necessary infrastructure to assemble a tier-1 gold portfolio in Ethiopia.

Askari says it is moving quickly to unlock value from its acquisition. Early reconnaissance has picked up widespread artisanal workings and visible quartz veins up to 65 centimetres wide in granodiorite and porphyritic granite.

These mineralised veins are particularly prominent at the Wayu Boda project. Additionally, abundant copper staining hints at potential polymetallic mineralisation.

Although assays are still pending, the neighbourhood’s already shown its colours. Historic exploration by Alecto Minerals just next door pulled rock chips grading up to a juicy 47g/t gold. Additional trenching hits, including 1.3 metres at 4.9g/t and 3.6m grading 1.5g/t, have provided clear proof the region may have serious firepower waiting to be tapped.

Askari says the real prize may lie beneath the surface after remote sensing and geophysical data lit up gold-bearing structures that may extend far beyond visible outcrops.

The company has already commenced preparations for high-resolution satellite studies and systematic mapping across the new holdings.

With gold pushing above US$3300 (A$5153) an ounce, the timing of the acquisition appears spot on. Adding to the gold price buzz, Ethiopia is seen as a pro-mining country with modern mining laws and a government welcoming foreign investment.

Askari’s leap into Ethiopia has given the company a first-mover edge among Australian explorers. The vast, 2.7M square kilometre Arabian-Nubian Shield hosts massive mines, such as Centamin’s 11M-ounce Sukari gold mine in Egypt and Barrick’s 30 million tonne Jabal Sayid copper play in Saudi Arabia. However, Ethiopia’s slice of this mineral-rich monster has remained virtually untouched.

Backed by a refreshed board and a beefed-up war chest, Askari is reshaping its future by offloading its Australian assets while going all-in on Africa. The company says its strategic pivot is part of a grand plan to build a tier-1 portfolio of gold, lithium and uranium assets across some of the continent’s most fertile, underexplored terrain.

On the sell side, Askari has put its WA-based Burracoppin gold project on the radar after a resource upgrade to 82,700 ounces at 1.2g/t. The company says suitors are already circling and that a successful sale could unlock valuable capital to turbocharge its African ambitions.

Meanwhile, the company cracked open the cheque book in September last year to snap up the Eyasi uranium project in northern Tanzania, grabbing 292 square kilometres of ground with strong nuclear potential. Eyasi joins a growing African stable that includes the newly acquired Ethiopian gold portfolio and the Uis lithium project in Namibia.

At Uis, early exploration has pointed to more than just lithium. There are also strong sniffs of tin, tantalum and rubidium. So far, 120 individual pegmatites have been mapped out and sampled ready for further work.

Beyond the latest Ethiopian deal, Askari says it remains hot on the acquisition trail, assessing additional gold projects in the region.

With boots on the ground and a clear growth strategy, the company appears to be positioning itself to ride the next big wave in African gold.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au