Uranium explorer and developer GoviEx Uranium has entered into a $5.5-million agreement with African Energy Metals (AEM) for the latter to acquire all of the issued and outstanding shares of GoviEx’s wholly-owned Malian subsidiary Delta Exploration Mali.

Delta holds three contiguous exploration licences – Falea, Bala and Madini – in Mali, known collectively as the Falea project.

Falea and Bala areas are highly prospective for unconformity type polymetallic uranium copper-silver deposits. The Falea project is a polymetallic (uranium, silver, and copper) deposit located in Mali, about 350 km west of the capital Bamako.

Under the terms of the agreement, AEM will make a cash payment of $500 000 and issue to GoviEx $2-million worth of AEM shares.

Subject to the re-issue of the Falea licence, AEM will also issue $3-million worth of common shares, as well as grant GoviEx a 3% net smelter royalty on the Falea project.

The sale of the Falea project is part of GoviEx’s strategy of focusing on its two advanced mine-permitted projects – Madaouela in Niger and Muntanga in Zambia.

While the Falea project will be managed by AEM, GoviEx will retain a considerable interest in the project, therefore maintaining a potential upside on any future discoveries.

GoviEx CEO Daniel Major says the transaction is a strategic deal which will enable GoviEx shareholders to maintain a significant interest in the Falea project while enabling the company to concentrate its efforts on the continued exploration and development of its two mine-permitted, advanced stage development uranium projects – Madaouela and Muntanga.

“Falea is a solid project with fantastic exploration potential and AEM is well placed to manage its development going forward, with in-country knowledge and experience,” he adds.

AEM executive chairperson Stephen Barley says Falea is a polymetallic project with a significant uranium resource.

“GoviEx will become an important shareholder of AEM and our shareholders will have the continuing benefit of their knowledge and mining expertise.

“Less than 5% of the property has been explored, so there is substantial exploration upside for uranium, copper, gold, and silver,” he says.

For so long as GoviEx holds at least 10% of the issued and outstanding common shares of AEM, GoviEx will have the right to appoint one director to AEM’s board of directors.

The transaction is expected to close on or before March 15.