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Desert Metals Stock Surges 64% Following Acquisition of Gold and Lithium Projects in Côte d’Ivoire

6 December 2023 09:45
Desert Metals Limited Gold Acquisition

Desert Metals Limited (ASX:DM1) has announced a strategic move into the West African mining sector by entering into a binding agreement to acquire 100% of CDI Resources Limited (CDI), a Côte d’Ivoire-based gold and lithium explorer, positioning the Company to leverage the abundant mineral potential of Côte d’Ivoire, known for its stable political environment and robust mining sector.

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Figure 1: CDI Resources Limited location and geological plan

Project Overview

CDI holds interests in seven gold and lithium projects, covering a substantial area of 2,769 square kilometres, including the Tengrela South Gold Project, Adzope Gold Project, and Agboville Lithium Project.

Notably, the Tengrela South Project, located in the Syama-Boundiali greenstone belt, which has demonstrated significant gold mineralisation with historical drilling revealing promising results including 8 metres at 30.0g/t gold and 40 metres at 1.0g/t gold.

The Adzope Gold Project, an application project, exhibits extensive alluvial, eluvial, and hard-rock gold mineralisation. The Agboville Lithium Project, comprising over 1,000 square kilometres of mineral permit applications, focuses on areas where lithium, beryllium, tantalum, and rare earth mineralisation have been identified in government mapping.

Desert Metals aims to enhance its existing portfolio, which includes nickel, rare earth, and gold assets in Western Australia’s Yilgarn Craton, with the acquisition aligning with the Company’s growth strategy and leveraging the untapped mineral potential of Côte d’Ivoire.

Côte d’Ivoire’s Mining Landscape

Côte d’Ivoire hosts eight operational gold mines managed by major industry players such as Barrick Gold, Endeavour Mining, and Perseus Mining.

The country’s political stability and commitment to mining sector growth make it an attractive investment destination in West Africa.

Côte d’Ivoire has witnessed substantial growth in gold production, surging from 400,000 ounces in 2012 to 1.5 million ounces in 2022, underscoring sustained sectoral expansion. This growth is complemented by the issuance of 124 exploration permits, offering numerous opportunities for exploration and development in the region.

Tengrela South Gold Project

The Tengrela South Project, strategically located near operating gold mines, has undergone extensive historical exploration. Results indicate a clear mineralised trend, presenting an opportunity for JORC-compliant Mineral Resource estimates in the near term. Ongoing exploration activities include auger programs and aircore drilling.

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Figure 2: Tengrela South gold prospects (See Schedule 2)

Adzope Gold Project

Situated in the Comoé Basin, the Adzope Gold Project boasts extensive alluvial gold mineralisation, with the presence of artisanal gold operations providing an immediate drill target. CDI is actively working to have the permit granted, paving the way for exploration to commence in the first half of 2024.

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Figure 3: Adzope Gold Project and artisanal workings

Agboville Lithium Project

The Agboville Lithium Project, located over intrusive granites, monzogranites, and granodiorites, holds significant potential for lithium, beryllium, tantalum, and rare earth mineralisation. Planned exploration activities include geophysics, mapping, rock chipping, soil geochemistry, and trenching.

Kounahiri and Kounahiri West Gold and Lithium Projects

The Kounahiri Projects, situated in central Cote d’Ivoire, exhibit a 15 kilometre-long gold-in-soil anomaly with possible parallel anomalies. Exploration activities, including stream sediment sampling and auger drilling, have confirmed this promising target.

Vavoua and Vavoua West Gold Projects

The Vavoua Projects, located on strike from the Abujar Gold Project, are yet to undergo modern mineral exploration. Systematic exploration, including aeromagnetic data re-processing and auger programs, is planned to uncover their gold mineralisation potential.

Board Changes

Renowned ASX director Stephen Ross is poised to enhance the Desert Metals Board, stepping into the position of Technical Manager for the Ivorian projects, a role that leverages his extensive expertise and regional knowledge.

Bringing 25 years of experience in West Africa and having served as a former director of West African Resources Limited, Ross is anticipated to contribute valuable insights to the board.

Company Comments

Desert Metal’s Managing Director Robert Stuart commented on the Acquisition.

“Desert Metals is extremely pleased with the acquisition of CDI Resources Limited,” he said.

“CDI has an impressive portfolio of highly prospective gold and lithium projects in Côte d’Ivoire including, in particular, the Tengrela South project in the multi-million-ounce Syama-Boundiali greenstone belt. This project is well advanced, has outstanding historical results, and is particularly exciting, given its location within 30km of Sissingué gold mine and 10km of the Atex lithium discovery.”

“The Acquisition will also strengthen the DM1 Board by appointing highly experienced ASX director and West African operator Stephen Ross as a Director.”

“Adding to the Company’s rare earth discoveries at Innouendy and Dingo Pass and its nickel, copper and gold projects in Western Australia’s Yilgarn Craton, we look forward to unlocking the gold and lithium potential on this exciting portfolio over the next 12 months. The Board believes this is an exceptional opportunity to create value for its shareholders.”

Desert Metals latest investor presentation can be found online here.

DM1’s Australian Stock Exchange-listed share price has risen 64.10% and is currently trading at $0.064 (9.30am UTC+ 8 hours).

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