Star Minerals has signed a binding agreement to earn a stake in the Cobra Uranium Project in Namibia from Madison Metals.

Namibian company Pennywort Investments (Proprietary), in which Madison has an 85% stake through its Namibian subsidiary, is the holder of exploration permit EPL 8531, which comprises the Cobra project.

The agreement will enable Star Minerals to earn up to a 51% interest in Pennywort through a series of cash payments, share issuances and exploration expenditures over three years, potentially amounting to $4.4m (A$6.46m).

It also requires Star Minerals to meet various investment milestones. These include staged cash payments, issuing common shares to Madison and fulfilling exploration expenditures.

This deal could see Madison benefit from a total value of approximately $4.4m (C$5.97m), alongside performance shares contingent on exploration successes.

The partnership is structured to incentivise progress, with Madison set to receive performance shares as Star Minerals achieves exploration milestones.

Upon fulfilling the earn-in conditions, the two companies will establish a JV, furthering the exploration and potential development of the Cobra Uranium Project.

As part of the agreement, Madison is required to issue 450,000 common shares to a non-arms-length individual in two tranches. The first half is due upon execution, with the remainder contingent on Star Minerals reaching its initial earn-in milestone.

Madison CEO and executive chairman Duane Parnham said: “This agreement strengthens Madison’s operational footprint in Namibia, as we now have active exploration efforts under way on two uranium projects in one of the world’s premier uranium mining jurisdictions.

“We believe this partnership will unlock significant value for both companies and our respective shareholders, and we look forward to advancing our mutual goal of driving sustainable uranium production to meet global energy demands.”