African Energy Metals inks option agreement for Peruvian gold-silver project
African Energy Metals has entered into a strategic option agreement to acquire a 100% interest in the Niñobamba advanced gold-silver project in Peru from Rio Silver.
The Niñobamba project, located in the Department of Ayacucho, covers 4,100 hectares and consists of two mineralized areas: the Niñobamba area and the Jorimina zone. This acquisition marks a significant expansion of African Energy Metals’ portfolio into precious metals in South America.
Scope of deal
Under the agreement, African Energy Metals will pay C$260,000 in the first year and up to $2m, including $500,000 as advance royalty payments. Rio Silver retains a 2% NSR royalty while African Energy Metals has the option to buy back 1% of the NSR for $1 million before commercial production.
2.5 million common shares will be issued upon regulatory approval. An additional 2.5 million shares will be issued by May 15, 2026. African Energy Metals may issue shares to cover 50% of any cash payment obligations.
Rio Silver will provide operational support and make its facilities in Peru available to African Energy Metals at no cost for at least one year. The agreement is contingent on approval by the TSX Venture Exchange and the NEX Exchange.
The project benefits from prior exploration and technical work by Rio Silver, Newmont, AngloGold, Bear Creek, and Southern Peru Copper, providing a strong basis for continued exploration. Rio Silver has secured an agreement with the local community, facilitating exploration activities, including a diamond drilling program at the Jorimina Zone.
A diamond drilling permit is expected in Q1 2025, allowing African Energy Metals to advance its exploration program. Executive Chairman Stephen Barley expressed enthusiasm about the agreement, describing it as “transformational.” He highlighted the high-quality technical work previously conducted, which provides confidence in launching a productive work program.
