Askari Metals’ bold vision of identifying a major exploration discovery at its Uis lithium project in Namibia has received a timely boost through the signing of a conditional investment agreement with global giant, Zhejiang Huayou Cobalt.
The deal, and an accompanying institutional investment raise, would boost the company’s coffers by more than $5.7 million at a pivotal time when it is aiming to beef up exploration.
Askari has entered into a subscription agreement with Huayou through the Chinese high-tech battery materials giant’s Hong Kong subsidiary, Huayou International Resources. The deal includes strategic investment of $2.5 million through a subscription for 4.5 million shares at an issue price of $0.55 per share.
Huayou, which will hold about a six per cent share in Askari when transactions are finalised, will also receive an attached listed option on a one-for-three basis with an exercise price of $0.25, expiring at the end of October next year.
Askari has raised an additional $3.25 million through the issue of 6.5 million shares, at an issue price of $0.50 per share, to select Australian and international institutional investors. Participants in the placement will also receive an attached listed option on a one-for-three basis at $0.25, which expires at the same time as the Huayou deal.
Huayou’s strategic investment is subject to a 12-month voluntary escrow period pursuant to a binding restriction agreement to be executed with Askari upon completion. Over the period of the agreement, Huayou will have the opportunity to participate in future equity issues by the company and has flagged its intent to increase its stake to 9.9 per cent.
Huayou is a leading manufacturer of new-energy battery materials in China and is listed on the Shanghai Stock Exchange with a current market capitalisation of a whopping US$12.8 billion (AU$19.1 billion).
Askari Metals executive director Gino D'Anna said: “We look forward to completing the Strategic Investment and welcoming Huayou onto the register. Having a tier-1 strategic investor such as Huayou not only adds credibility to our strategy in Namibia, but also supports our vision to identify a major exploration discovery.”
In December, Askari wrapped up its first drill campaign at Uis lithium project when it completed 59 RC holes for 3017m as part of an overall 10,000m program where it encountered visible lithium mineralisation.
A recent surface-sampling program at its Namibian operation returned positive results including grades of up to 3.1 per cent lithium oxide, 1.3 per cent tin, 658 parts per million tantalum and 4214ppm rubidium. The samples were collected over a large number of exposed pegmatites from several old mine workings where historical mining for tin and semi-precious stones was conducted.
The project is located directly along strike from an operating tin, tantalum and lithium mine owned by AfriTin Mining that hosts a mineral resource of 71.54 million tonnes at 0.63 per cent lithium oxide, 0.134 per cent tin and 85ppm tantalum.
Askari’s second phase of RC drilling is currently underway. It is planned to cover a minimum of 4000m with four holes already completed and assay results from phase one expected in coming weeks.
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By Michael Philipps
