Montero Mining and Exploration has signed a binding agreement to acquire around 80% stake in Ethiopia-based Hulager General Import and Export’s Moyale graphite project in Ethiopia.
Under the deal, Montero will have six months to carry out a technical due diligence and the deal is subject to regulatory approval.
The company will initially gain control of 51% interest in the property by committing to complete a report in compliance with NI 43-101 within two years with $1.5m investment.
A further 29% interest will be acquired after conducting a feasibility study within three years to a maximum expenditure of $10m.
Montero president and CEO Tony Harwood said: "The Moyale Graphite Project has seen limited mapping, sampling and trenching in addition to limited geophysical surveys with no drilling conducted to date.
"Montero intends to define a high quality large flake graphite resource in compliance with NI 43-101 whereby a long life mine plan is outlined.
"We look forward to working with our partner in developing the Project."
Located in southern Ethiopia, the project lies 5km to the west of the Moyale town in the Oromia region connected by an asphalt road to the capital, Addis Ababa.