Armadale Capital has signed a binding heads of terms agreement to acquire more than 50% of Africo American Incorporated (AAI), the parent company of the Canyon Silver project in Northern Idaho, US.

This move aligns with Armadale's strategy to expand its portfolio with high-growth, low-cost, near-term resource projects, particularly in precious metals.

The initial option allows Armadale to purchase a 25% interest in AAI for a cash consideration of $500,000 before the end of December 2024.

If exercised, a subsequent option to increase its stake to 43.8% for an additional $1m is available.

A final option would enable Armadale to acquire a further 7% interest, bringing its total holding to 50.8%, for $280,000.

Should Armadale exercise the final option and acquire a majority in the Canyon Silver project, the seller retains the right to sell the remaining shares to Armadale for nearly $1m.

The directors of Armadale have expressed their belief in silver as a strategic resource with diverse applications in medical, electronic and industrial sectors.

Investing in a controlling stake in a precious metal project within a renowned silver region in North America marks a significant advancement for Armadale.

To fund this acquisition and initiate work on the Canyon Silver project, as well as to advance its Mahenge graphite project in Tanzania, Armadale will raise around £650,000 through the issuance of 91.43 million shares.

The company's focus will be on identifying known resources, realising near-term production and enhancing understanding of the orebody at Canyon Silver.

Armadale CEO Matt Bull said: “The board believes that the Canyon Silver transaction creates a significant opportunity for Armadale in a safe and proven geographic, legislative, and perhaps most of all, a rich and proven geologic area of North America.

“Industries using silver, lead and zinc are well known and continuing to grow with exciting demand fundamentals.

“Concurrently, the silver, lead and zinc-producing areas of North America have been in hibernation or shrinking since the early 1980s until now. Today they are turning to growth, with America's focus on local production and refining of these core strategic metals for energy and related technology.

“In addition, silver is invaluable in solar panels, certain batteries and electronic components and always as an alternative and complementary money and store of value alongside gold.”