Askari inks N$31m deal to expand Namibian exploration

March 22, 2023

Askari Metals, an ASX-listed lithium explorer, has signed a N$42-million (Australian $2.5 million) deal with Zhejiang Huayou Cobalt Co., a Chinese battery metals behemoth.

The agreement, which is subject to the completion of the Uis Acquisition Agreements and other conditions, will see Huayou receive 4.5 million shares at an issue price of 55 cents each, representing a 10% premium to the stock’s last close on Monday.

Huayou will also receive an ASX-listed option on a 1-for-3 basis, with an exercise price of 25 cents and a 31 October 2024 expiry date.

The Chinese company intends to grow its equity position in Askari to 9.9% and maintain its equity stake by participating in future issuances.

Once the 9.9% holding target is reached, Huayou can appoint a nominee to the board of Askari. In addition, Askari has raised N$40 million (A$3.25 million) via an institutional placement of 6.5 million shares at an issue price of 50 cents, providing an overall blended price of A$0.52 per share, representing a premium of approximately 4.0% to the 5-day VWAP of the share price on 17 March 2023.

Australian and international institutional investors are participating so far, under the lead manager Canaccord Genuity alongside facilitator and adviser Peak Asset Management and Minmetals Securities.

Askari Executive Director Gino D’Anna emphasized his support for the deal and the welcome partnership with Huayou, “which adds credibility to our strategy in Namibia and also supports our vision to identify a major exploration discovery.”

The funds raised will be used to drive additional exploration across Askari’s wider portfolio of assets, including the company’s expanding lithium portfolio.

The Uis Lithium Project in the Erongo region is part of Askari’s portfolio and the funds will be used to accelerate exploration efforts there.

Askari Executive Director D’Anna said, “We’re aiming to demonstrate the potential scale of mineralisation at the Uis Lithium Project through drilling and exploration campaigns and lead the lithium charge in Namibia.”

Huayou’s recent acquisition of the Arcadia Lithium Mine in Zimbabwe, along with its extensive experience in the production of cobalt and lithium in both China and global operations, further emphasizes its willingness to invest in Africa.

D’Anna noted that Huayou’s partnership with Askari supports the company’s strategy in Namibia and enhances its credibility. “We look forward to updating shareholders as exploration activities continue,” he said.

Overall, the deal between Askari and Huayou is a significant step forward for the exploration and production of lithium in Africa.

The funds raised will be used to accelerate exploration efforts at the Uis Lithium Project and drive additional exploration across Askari’s wider portfolio of assets, with the ultimate goal of delivering a maiden resource as quickly as possible.













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Last modified on Thursday, 23 March 2023 18:24

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