African Energy Metals PLC today announced that it has entered into an option agreement to acquire 100% interest in the Niñobamba advanced gold-silver project in Peru from Rio Silver.
Under the terms of the agreement, African Energy Metals will make a $260,000 payment in the first year and can earn full ownership of the project. The agreement also includes a 2% net smelter return (NSR) royalty payable to Rio Silver, with an option for African Energy Metals to buy back 1% of the NSR for $1 million prior to commercial production.
To acquire the project, African Energy Metals will issue 2.5 million common shares to Rio Silver upon regulatory approval and an additional 2.5 million shares by May 15, 2026. The company has the option to issue shares for 50% of any cash payment obligations. A $10,000 non-refundable deposit was paid upon execution of the agreement.
Rio Silver will provide valuable support to African Energy Metals, including operational assistance and access to its facilities in Peru for at least one year.
“We are extremely excited about this transformative agreement,” stated Stephen Barley, Executive Chairman of African Energy Metals. “The significant amount of technical work already completed by Rio Silver, as well as previous exploration by Newmont, AngloGold, Bear Creek, and Southern Peru Copper, provides a strong foundation for our exploration and development efforts.”
The Niñobamba project, located in the Department of Ayacucho, Peru, encompasses 4,100 hectares and comprises two mineralized areas: Niñobamba and Jorimina. Rio Silver has already secured a surface access agreement with the local community, facilitating an initial phase of diamond drilling at the Jorimina Zone.
The agreement and all related share issuances are subject to the approval of the TSX Venture Exchange and the NEX Exchange.
