Forte Energy (ASX: FTE, AIM: FTE) will increase its African exploration portfolio through the acquisition of an unlisted British Virgin Islands registered company known as Leo Mining and Exploration Ltd, which has interests in a portfolio of uranium and rare earth elements.
The parties are in the process of negotiating the terms of the final agreements.
Forte already holds a portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa, which also have the potential for rare earth elements.
The proposed acquisition will elevate Forte to a larger scale Africa-focussed exploration and development company.
Leo Mining and Exploration assets
Leo Mining holds a 48% shareholding in Mkango, which owns 100% of two prospecting licenses covering a combined area of 1,751 square kilometres in southern Malawi.
Mkango’s most advanced stage project is the Songwe Hill rare earth project where it has defined a significant Indicated and Inferred REE Mineral Resource Estimate.
In parallel with completion of environmental studies and metallurgical test work for the Songwe project, Mkango is also undertaking regional exploration for rare earth elements and uranium in Malawi.
In April this year Mkango closed an oversubscribed C$2.3 million private placement.
Proposed acquisition details
It is anticipated that the proposed acquisition will be effected through a statutory merger under British Virgin Islands law pursuant to which Forte shall issue and allot to Leo Mining shareholders a total of 95% of the company’s issued share capital (equivalent to approximately 860 million ordinary shares in the capital of Forte), as consideration for 100% of the issued share capital of Leo Mining.
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