As part of the transaction, AFDG is expected to issue shares to CGAIN - an international company operating in several sectors and industries - and the existing operating team. The transaction is expected to result in the existing AFDG shareholders retaining majority ownership of the company. The government of the Republic of Niger is expected "to retain a working interest in the operations of the Niger licence after cost recovery".
The transaction is expected to close in the fourth quarter of 2024, subject to shareholder approval, customary due diligence and documentation.
Delaware-based AFDG, which is dedicated to the development of the African continent, said it expects to change its name to African Uranium in conjunction with the closing. The company intends to hire a Chief Executive Officer with extensive geological experience in uranium exploration in West Africa, with the existing exploration team expected to retain their current roles.
AFDG said the transaction would create a uranium exploration company "with a focus on creating value around Africa's under explored basins of uranium. After close of the transaction, AFDG will dedicate itself to uranium exploration going forward on the African continent. By working in concert with the government of Niger, African Uranium will create local skills to develop the highly promising nuclear industry on the continent".
"We are highly enthusiastic to move forward in such a paradigm-changing venture for our company and our shareholders," said AFDG Chairman Alan Kessler.
Ouricha-3 is located within the northern Agadez region of Niger. It is 35 km northwest of Global Atomic's Dasa project, Africa's highest grade uranium deposit, and 20 km south of Orano's Imouraren uranium mine, one of world's largest uranium reserves. The deposit straddles the Arlit fault, a key structure for uranium mineralisation at Imouraren and the mines in Arlit.
Historic exploration on and around Ouricha-3 began was started in 1977 by France's Cogema. More than two-thirds of the Ouricha-3 permit is located in the Afouday perimeter, which was the subject of exploration by Areva in 2006.
GoviEx contests Madaouela decision
In July last year, a coup d'état occurred in Niger, during which the country's presidential guard removed and detained president Mohamed Bazoum. Subsequently, General Abdourahamane Tchiani, the Commander of the Presidential Guard, proclaimed himself the leader of the country.
Since then, Nigerien authorities have withdrawn the operating permit for Orano's Imouraren uranium mine, which was issued to its subsidiary Imouraren SA in 2009. Also, Canada's GoviEx Uranium has recently had its mining rights to the Madaouela deposit withdrawn.
In a 17 July letter to stakeholders, GoviEx Uranium Executive Chairman Govind Friedland said the withdrawal of its mining rights for Madaouela is "especially perplexing". Any future developers would effectively need to "start from scratch", he said.
"The necessity to conduct a new drilling campaign, environmental assessments, social studies, metallurgical test work, etc - tasks into which we have already invested millions - will inevitably lead to significant project delays," Friedland said. "Such delays are contrary to the government's stated objectives for rapid development and economic progress in the region."
According to GoviEx, the decision to withdraw its mining rights did not follow the withdrawal procedure prescribed under the applicable mining code. "We are fully prepared to pursue all necessary legal avenues to defend our rights and protect our investments and have formally written to the Ministry of Mines to contest the decision and to initially seek an amicable solution as per Niger's Mining Convention," Friedland said. "We are starting the process to secure independent assessments of damages related to the withdrawal of our mining rights."
The company said it now intends to concentrate on the development of its Muntanga uranium project in Zambia, which it has been working to develop since 2016. The project, it said, has "massive potential, poised to become a cornerstone of our company".
