AuKing Mining (ASX:AKN) has agreed to acquire the Tundulu Rare Earth Elements Project in southeastern Malawi from Tusker Minerals (ASX:TSK) for a total consideration of $5.55 million.
The company has made a non-refundable $50,000 cash payment to secure the 40-day exclusivity period.
On completion of the acquisition, AuKing will pay $1 million, along with $1.25 million in shares and $1 million in performance shares.
The company has received commitments to raise $3 million to fund initial payments to Tusker, along with funding for initial exploration at Tundulu and at the company’s other projects.
AuKing will issue a maximum of 200 million shares at $0.015 each, with GBA Capital acting as the lead manager.
AuKing Managing Director Paul Williams says the company is taking an “exciting” step in its critical minerals strategy by acquiring Tundulu.
“Tundulu is a district-scale carbonatite ring complex in southern Malawi with an interesting profile of bastnaesite and apatite containing abundant rare earth mineralisation and easily accessible by road,” Williams says.
“AuKing intends to commence exploration activities following completion of the acquisition, with an initial drilling program planned to advance understanding of the mineralisation.
“Subject to results, the company is targeting the delivery of an initial mineral resource estimate within the next 12 months.”
Tusker CEO Cliff Fitzhenry says the transaction will allow the company to prioritise advancement of its rutile and heavy mineral sands assets in Malawi and Cameroon.
“The divestment delivers non-dilutive funding expected to support our activities through 2026, while retaining meaningful exposure to Tundulu’s upside via our shareholding in AuKing,” Fitzhenry says.
“We believe this approach maximises value for shareholders by focusing our resources on our highest-priority assets while maintaining leverage to the rare earth sector.”
Tusker Minerals is an African explorer focused on advancing its portfolio of critical minerals assets in Cameroon and Malawi.
AuKing Mining is a resource explorer focused on advancing to become a mid-tier copper, uranium, and other base and precious metals producer.
Write to Maddison Elliott at Mining.com.au
Images: Tusker Minerals
