Desert Metals Ltd. has entered into a binding agreement to sell its 80 per cent interest in Leo Resources, owner of the Tengrela South gold project in northern Côte d’Ivoire, to Canadian-listed Waraba Gold Ltd. for up to AU$5 million in cash plus a royalty.
Under the terms of the agreement, Desert Metals will receive AU$2.5 million in cash by completion, consisting of a AU$100,000 exclusivity fee already paid, a AU$500,000 deposit on signing, and AU$1.9 million at closing.
An additional AU$2.5 million cash payment is contingent on the extension of the Tengrela South permit beyond November 2027.
Desert Metals will also retain a 1 per cent net smelter return (NSR) royalty over the 212.66-square-kilometre permit area, which Waraba holds an option to buy back for A$2.2 million in cash or equity. Local Ivorian partner Smart Mineral Explorer SARL will retain its 20 per cent carried interest in the project.
Desert Metals Managing Director Stephen Ross described the sale as an excellent outcome for shareholders, noting that Waraba is well positioned to advance Tengrela South given its recent exploration successes on neighbouring permits.
“For DM1, the sale removes the need for a dilutive capital raising whilst retaining exposure to ongoing upside at the Tengrela South project through the NSR,” he said.
Proceeds from the divestment will be directed toward advancing the company’s core assets in south-eastern Côte d’Ivoire.
Specifically, funds will support maiden drilling at the Adzope Gold Project’s Nyan prospect, which features a high-grade gold-in-soil anomaly extending over seven kilometres along strike from the King Kong discovery.
Sale proceeds will also fund initial exploration at the Agboville gold-lithium project, support the identification and acquisition of complementary mineral assets, and provide working capital.
Completion remains subject to customary closing conditions, including ministerial approval in Côte d’Ivoire.