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Nex Metals (ASX:NME) has jumped modestly on Monday after revealing it’s heading to Egypt to oversee an already-producing gold project, the North Hennai Concession, in the same region of the Eastern Desert that hosts AngloGold’s Sukari mine.
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NME will effectively sit on as Operator at North Hennai after inking a binding HOA with a local entity called Golden Eagle.
The company reported North Hennnai is a small project but boasts “significant potential upside with process improvements and further exploration.”
The company reports 44% of profits will flow back to NME while it receives “100% priority cost recovery from operations”; a third entity called Shalateen Mineral Resources Company is also wrapped into a production sharing contract.
Shares climbed 4% on Monday morning but on very low liquidity – some $3.7K worth of shares as around 10.50am AEST based on public data via Market Index. NME sits at a market cap of $8.7M in that same breath with 335M shares issued. (Still, that liquidity volume reflected a healthy climb above the 4wavg.)
Those low volumes, though, could show a market pricing in uncertainty. “We believe this is one of the most under-explored prospective mining districts in the world,” NME managing director Ken Allen said – big claims, but further commentary painted the picture of a project yet to get truly going.
“Our immediate next steps are a continuation of our due diligence activities at this project, and consider what opportunities there are to both implement more efficient production methods… the North Hennai project is a strategic first step in a broader push by Nex Metals Explorations into the Egyptian Eastern Desert.”
NME last traded at 2.6cps.
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