Neo Energy Metals to spend $21mn to acquire two gold, uranium projects in South Africa

British miner Neo Energy Metals (Neo) has through its wholly-owned South African subsidiary Neo Uranium Resources Beisa Mine (NURB) acquired two uranium and gold projects in that country for about $20.7mn.

The LSE-traded firm said in a release on August 13 that the deal to acquire 100% interest in the Beisa North Uranium and Beisa South Gold projects from Sunshine Mineral Reserve (Sunshine) places it on the path to becoming one of South Africa's biggest producers of the metals.

The Beisa projects comprises South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves compliant resources of 90.24mn pounds (Mlbs) uranium and 4.17mn ounces (oz) of gold.

In terms of the agreement, Neo will grant Sunshine a royalty on uranium and gold produced and sold by the company from the Beisa projects of between $3.00/lb to $5.00/lb when the uranium spot price is between $100/lb and $150/lb and a gold royalty of $7.50/oz

The Beisa projects, comprising two granted prospecting rights, extend over about 80 square kilometres in the famed Witwatersrand Basin in central South Africa.

"This acquisition marks a major milestone for Neo Energy Metals, and significantly expands our footprint in one of the richest and long-standing uranium-producing regions in the world," said Neo's chief executive, Sean Heathcote. 

"The Beisa North and Beisa South Uranium Projects not only bolster our uranium resource base but also further strengthens the company's ability to achieve its strategic goal of becoming a major player in global uranium market and as South Africa's leading uranium company."

He added that the project has a potential combined in situ value of over $17bn, equivalent to over 210Mlbs of uranium, based on current uranium and gold prices.