Critical One Energy, formerly known as Madison Metals, has sold its Khan and Cobra uranium projects in Namibia to Canadian firm Dark Star Minerals.

The deal is valued at US$3.5 million (about N$62 million).

A statement issued by Critical One Energy on Saturday says Dark Star will pay Critical One N$13.4 million (US$760 000) by the end of the transaction and issue shares valued at approximately N$48.7 million (US$2.75 million).

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"Dark Star will make further cash and share payments as per the following schedule to earn 100% of Critical One's interest in the Khan and Cobra Uranium Projects located in Namibia, Africa . . . " the statement reads.

Dark Star has already made a payment of N$2.7 million (US$150 000) and issued 14 million common shares to Critical One, with the remainder to be paid over a period of two years.

Additional payments include N$4.4 million (US$250 000) in cash and shares worth N$31 million (US$1.75 million).

This is to be paid by the second anniversary of the agreement.

Under the agreement, Critical One will receive a 2% gross overriding royalty on all metals produced from the projects once the total value of cash and share payments exceeds US$3.5 million.

Dark Star has the option to buy back 0.5% of the royalty for N$26.4 million (US$1.5 million) within 30 days of production starting.

"We are looking forward to working with Dark Star to accelerate the exploration and development of these two significant uranium projects.

As a significant shareholder and director of Dark Star, I will continue to contribute to the development of these two exciting uranium projects," says Critical One chief executive Duane Parnham.

Namibia is currently the world's third-largest uranium producer, according to the World Nuclear Association.