AFRICAN ENERGY METALS ANNOUNCES OPTION AGREEMENT TO ACQUIRE A 100% INTEREST IN NINOBAMBA ADVANCED SILVER GOLD PROJECT IN PERU AND PRIVATE PLACEMENT

African Energy Metals Inc. has entered an option agreement with Rio Silver Inc. for African Energy Metals to earn a 100-per-cent interest in Rio Silver's Ninobamba advanced silver-gold project, located in the department of Ayacucho, 500 kilometres (km) southwest of Lima, Peru.

Highlights:

• Over $10-million (U.S.) has been spent in prior exploration activities by majors, such as Newmont, Anglogold, Bear Creek and Southern Peru Copper;
• Over 9,700 metres (m) of drilling completed with historical result highlights of 72.3 metres of 1.19 grams per tonne (g/t) gold (Au) starting at a depth of 53 metres; 87 g/t silver (Ag) over a drilled interval of 130 metres starting from a depth of nine metres; 54 g/t silver over a drilled interval of 96 metres starting from 23 metres; and trenching by Rio Silver revealed a new gold-silver zone returning 56 metres of 1.03 g/t gold and 98.9 g/t silver, and 21.77 metres of 1.32 g/t gold and 102.46 g/t silver ending in mineralization;
• 4,100 hectares of 100-per-cent-owned royalty free property;
• Extensive database from all previous operators;
• Experienced Rio Silver personnel will provide a minimum of one-year continuity and operational support;
• Excellent community relations critical to success in Peru;
• Private placement up to $1-million.

The project represents an opportunity to develop a substantial silver and gold deposit in Peru, a country known globally for its mineral richness and existing infrastructure.

Stephen Barley, executive chairman of African Energy Metals, stated: "We are very excited to announce this transformational agreement. Through the high-quality work completed by Rio Silver, Newmont, AngloGold, Bear Creek and Southern Peru Copper, we are starting with a significant amount of technical information, which will allow us to continue a productive work program with a high level of confidence. One of the key assets is that the project comes with a geological technical support team located in Peru with over 30 years of combined experience in the region, and with existing strong relationships with local partners, communities and suppliers."

The Ninobamba project

The 100-per-cent-owned Ninobamba project is in the department of Ayacucho and covers an area of 4,100 hectares. The project comprises two mineralized areas: the Ninobamba area and the Jorimina zone. Two separate communities control the surface rights, one in each of the project areas. Rio Silver has negotiated a surface access agreement with the local community facilitating a first-phase diamond drilling program at the Jorimina zone and is anticipating a diamond drilling permit to be granted during Q1 (first quarter) 2025.

The Jorimina zone is located approximately 6.5 kilometres west of Ninobamba, where Rio Silver acquired an extensive database from Newmont Mining Corp., which includes diamond drill logs and assays, surface samples, geophysical data, and metallurgical testing. Approximately $10-million (U.S.) has been spent on historical exploration programs since 2002 on the entire project area by Anglogold, Bear Creek and Newmont. Rio Silver has secured most of the data from these extensive programs and particularly the $7-million (U.S.) spent by Newmont at Jorimina, which culminated in a successful internal prefeasibility study identifying sufficient potential capable of supporting a robust mid-sized mine. It also noted the possibility for a much larger discovery as both Newmont and its predecessor, Southern Peru Copper, realized that the porphyry source was nearby (Newmont internal memo, 2012). Rio Silver geologists have drawn similarities with the geology at Ninobamba to that of Barrick's multimillion-ounce Perina gold mine, located in central Peru, indicating substantial expansion potential. (Reference to this property is for information only and there are no assurances that African Energy Metals will achieve the same results.)

From 2009 to 2010, Newmont completed 13 diamond drill holes totalling 4377 metres at Jorimina. As a highlight from the historical reports available, the best intercept from the 13 holes showed drill hole JOR-001 returning 72.3 metres of 1.19 g/t Au starting at a depth of 53 metres. The true widths of mineralization from this drill hole are not yet known. Further drilling is required to determine both the lateral and vertical extent of the mineralization. Historical diamond drilling results conducted by AngloGold in 2002 on the main Ninobamba area included DDH-2, which reported assay results of 87 g/t silver over a drilled interval of 130 metres starting from a depth of nine metres, and DDH-4, reporting 54 g/t silver over a drilled interval of 96 metres starting from 23 metres. The true widths of mineralization from this drill hole are not yet known and remain to be determined.

Highlights from the trenching program conducted by Rio Silver in 2012 at the Ninobamba North zone discovered a new gold-silver zone, including 56 metres of 1.03 g/t Au and 98.9 g/t Ag in trench TR-01, and 21.77 metres of 1.32 g/t Au and 102.46 g/t Ag in TR-04, ending in mineralization (Rio Silver news release of Jan. 14, 2013). These results show the Ninobamba property possesses a strong gold component associated with a high sulphation mineralizing event. Further exploration is required to determine the precious metal zonation, alteration patterns and widths. The trenches were cut approximately perpendicular to the mineralized structure and the true width of mineralization is yet to be determined.

The project is underlain by late Tertiary volcanic rocks, which are geologically like many high sulphation systems in Peru. Given the nature of the systems typically observed in the project region, African Energy Metals, believes the growth potential is significant and will provide further details in upcoming releases to highlight its exploration plan.

Name change

Concurrent with or prior to the closing of the acquisition of the project, African Energy Metals intends to change its name and trading symbol to better reflect the new focus. A further announcement will be made regarding the name change. There will be no share consolidation with the name change.

National Instrument 43-101 technical report

African Energy Metals will commission an independent technical report on the Ninobamba project to be prepared in accordance with NI 43-101, Standards of Disclosure for Mineral Projects. A copy of the final report will be filed on SEDAR+ after a review has been completed by the NEX.

Terms of the option agreement

Under the terms of the option agreement dated Jan. 19, 2025, African Energy Metals has the right to earn a 100-per-cent interest in the project upon full exercise of the option under the option agreement. As set out in the attached table, the option agreement requires payments of an aggregate $260,000 (Canadian) during the first year of the option agreement and further payments of up to $2-million (U.S.), $500,000 (U.S.) of this amount are advance payments on any royalties payable under the royalty agreement under the net smelter return (NSR) royalty of 2 per cent granted to Rio Silver. African Energy Metals retains the right to buy back a 1-per-cent NSR for $1-million (U.S.) prior to commercial production on the project. The option agreement requires the issuance to Rio Silver of a total of 2.5 million common shares of African Energy Metals upon receipt of regulatory approval and a further 2.5 million common shares on the earlier of the date that is one year from the receipt of exchange approval or March 15, 2026. African Energy Metals has the right but not the obligation to issue African Energy Metals shares in lieu of 50 per cent of any cash payment obligation save and except for the $260,000 payments in year 1, which must be made in cash. African Energy Metals paid $10,000 on a non-refundable basis to Rio Silver when the option agreement was executed. Rio Silver will provide operational support and use of Rio Silver facilities in Peru for a minimum of one year at Rio Silver's cost. Rio Silver is an arm's-length party to African Energy Metals. The share issuances and payments under the option agreement are subject to the approval of the TSX Venture Exchange and the NEX.

Concurrent part and parcel private placement

The company intends to complete a non-brokered concurrent part and parcel private placement of up to 10 million units of its securities at a price of 10 Canadian cents per unit for aggregate proceeds of $1-million (Canadian). Each unit will consist of one common share of the company and one-half of one common share purchase warrant. Each warrant will entitle the holder thereof to acquire one additional common share in the capital of the company at a price of 20 cents per warrant share at any time prior to 5 p.m. Vancouver time on the date that is 12 months following the closing date. The warrants may be subject to accelerated exercise provisions.

The proceeds from the financing will be used for general working capital purposes primarily relating to the approval and closing of the project acquisition and to conduct a preliminary exploration program on the project. In connection with the financing, the company may pay finders' fees in cash or securities or a combination of both, as permitted by the policies of the TSX Venture Exchange and the NEX.

The securities issued pursuant to the financing will be subject to a hold period under applicable securities laws, which will expire four months plus one day from the date of closing of the financing. Closing of the financing is subject to receipt of all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange and the NEX.

Finders' fees

In connection with the acquisition of the project, African Energy Metals intends to issue up to 450,000 common shares as finders' fees to an arm's-length party, as permitted by the policies of the TSX Venture Exchange and the NEX. The securities issued pursuant to the finders' fees will be subject to a hold period under applicable securities laws, which will expire four months plus one day from the date of issuance on closing of the acquisition of the project, and are subject to receipt of all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange and the NEX.

Qualified person

Jeffrey Reeder, PGeo, a qualified person as defined in National Instrument 43-101, has prepared, supervised the preparation or approved the scientific and technical disclosure contained in this news release.

About African Energy Metals Inc.

African Energy Metals is a natural resource company with a focus on the acquisition, exploration, development and operation of precious metal mining exploration projects. The company's main focus will be on exploring and developing the advanced Ninobamba silver-gold project in the mining supportive country of Peru.

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