CHAMWE KAIRA
Australian-listed Core Energy Minerals has entered into an earn-in agreement with Deep Yellow subsidiary Reptile Mineral Resources and Exploration (RMR) that could see it acquire a 51% stake in a Namibian uranium joint venture through a A$5 million (N$57.5 million exploration investment.
The agreement covers Nova Energy (Namibia), which holds Exploration Prospecting Licences 3669 and 3670 covering about 600 square kilometres west and south-west of the Langer Heinrich uranium mine.
Deep Yellow, through RMR, currently holds a 65% interest in the joint venture, with Nova Energy (Africa) holding 25% and Namibian entity Sixzone Investments holding 10%. Under the agreement, Core Energy will earn its interest in two phases.
In the first phase, Core Energy will spend A$2 million within 18 months to acquire a 25% interest in the joint venture.
It can then acquire a further 26% by spending another A$3 million within 24 months after completion of the first phase.
If both phases are completed, Core Energy will hold 51% of the joint venture, while RMR’s interest will fall to 31.85%, Nova Africa’s to 12.25% and Sixzone’s to 4.9%.
Core Energy will manage the joint venture during the earn-in period. The existing shareholders will be free carried until Core Energy has met its expenditure commitments, after which shareholders will generally contribute to costs on a pro-rata basis.
Sixzone’s interest will remain carried, with its share of expenditure to be recovered from future dividends.
Deep Yellow said the two licences are considered non-core assets as it focuses on its broader uranium growth strategy.
The company is pursuing a dual-pillar strategy aimed at building a globally diversified uranium producer with a targeted production profile of more than 10 million pounds of uranium per year.
Its development portfolio is anchored by the Tumas uranium project in Namibia and the Mulga Rock project in Western Australia, while exploration exposure includes the Omahola project in Namibia and the Alligator River project in Australia’s Northern Territory.
The earn-in provides Core Energy with exposure to prospective uranium ground close to one of Namibia’s established uranium operations, while allowing Deep Yellow to retain exposure to the project without funding the full exploration programme.
