Source: Desert Metals
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  • Thinly traded WA-based microcap Desert Metals (ASX:DM1) is setting up shop in Africa
  • The company will acquire 100 per cent of a privately held Côte d’Ivoire company CDI Resources
  • CDI holds interests in seven projects covering gold and lithium and is registered in Australia
  • The company will also conduct a share placement in the near future
  • Shares last traded at 3.9 cents

WA-based polymetals explorer Desert Metals (ASX:DM1) has announced it’s setting up shop in West Africa.

The company will soon boast seven projects covering gold and lithium in Côte d’Ivoire – in English, the Ivory Coast.

The thinly traded microcap is to acquire 100 per cent of an Australian-registered company called CDI Resources.

Purchase details

Desert will pay $750,000 for CDI and raise $2.5 million in a placement.

Its shares are halted until it has the cash, where Desert will be required to adhere to set works programs.

Management is required to continue spending money on drills for its WA projects, as well as new African assets.

Its domestic WA project, Mt Opal, sits on geotechs’ radars in particular.

CDI assets

CDI Resources holds permits totalling 2769 sq.km in the country, though, some of that landholding is currently under application.

Notably, the Adzope gold project and Agboville lithium project are both little more than permit applications at this time, per Desert Metals’ market update on Monday.

Permits for CDI’s Tengrela South gold project are granted and that acreage boasts historic drilling data boasting high-grade intersections.

Tengrela turned over an 8-metre intersection grading at 30g/t gold, though, that core is standalone and may be a one-off.

Board addition and conditions

One Stephen Ross described as an ASX Director, will join the board of Desert Metals following the acquisition of CDI – likely the same Mr. Ross currently NED at Trigg Minerals (ASX:TMG).

CPS Capital Group is acting as lead manager for the acquisition, taking a six per cent cut.

Worth noting: CDI first must acquire 51 per cent of an Ivory Coast company abbreviated as SMEX.

That entity holds 100 per cent of the Tengrela South gold project, one of CDI’s assets Desert Metals is targeting.

Geopolitical risk factor

While the Ivory Coast has so far enjoyed relative stability for the Sahel region in recent years, a wave of coups in West Africa has taken place since 2020.

The nation of Mali started the trend, with instability in formerly Francophone colonies being particularly pronounced.

Each one of these events is contextualised in its own national setting, but, the contagion effect can’t be ignored.

In a recent interview with Al Jazeera, West African nation Sierra Leone’s President Julius Maada Bio expressed confusion over a sharp rise in Sahel instability, hinting at organised disruption in the region.

This is a big claim for a region that has been, historically, marked by instability – at least for the last two hundred years.

The presence of ISIS offshoots and other jihadist extremists throughout the Sahel is nothing new but also remains a risk factor. So far, however, the Ivory Coast has mainly kept these elements contained within the nation’s north.

But like all of Africa, things in the Sahel can change quickly – investors ought to keep that in mind.

Desert Metals shares last traded at 3.9 cents.

DM1 by the numbers
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