Nasdaq-listed Greenland Mines has signed a definitive agreement with TSX-listed Neo Performance Materials to acquire full ownership of the Sarfartoq rare earths project in south-west Greenland for $35-million.

The transaction establishes a highly strategic, Western-aligned critical minerals platform.

The project hosts 35-million kilogrammes of combined neodymium and praseodymium. With the total oxides recoverable from the project comprising between 25% and 40% of these elements, it ranks among the highest neodymium and praseodymium resources globally.

Neo remains a strategic shareholder in the project through locked-in rights for up to 60% of future production from Sarfatoq, for use in its European magnet platform.

Greenland Mines also owns the Skaergaard asset, which, combined with Sarfartoq, creates the potential for a critical minerals hub that is outside of China and close to the US.

Skaergaard offers exposure to palladium, gold and platinum, with potential by-products including vanadium, gallium, iron-ore and titanium.

Greenland Mines plans to fast-track an updated technical and economic study on Sarfartoq, built on more than 23 000 m of drill results and the existing mineral resource estimate. The company aims to update the pricing assumptions in particular, given that rare-earth prices are two times higher then when the prior 2011 preliminary economic assessment was undertaken on Sarfartoq.  

The consideration for the project will be paid in the form of $20-million in cash and $15-million in newly issued Greenland Mines shares.

“We wish Greenland Mines every success as they advance this project, while we maintain our commitment as an offtake partner and shareholder. This agreement reflects our disciplined approach to capital allocation and reinforces Neo's strategic identity as a midstream and downstream advanced materials company, where we create the most value for our customers and shareholders,” comments Neo CEO and president Rahim Suleman.

Greenland Mines president Bo Møller Stensgaard concludes that Sarfartoq is a transformational addition to Greenland Mines' North Atlantic strategy.

“It will give investors exposure to two large-scale Greenland critical minerals projects and bring Neo Performance Materials on board as an offtake partner — connecting an upstream Greenlandic source of neodymium and praseodymium feedstock to Neo's midstream and downstream magnet platform.

“We have great respect for the extensive technical work already completed on Sarfartoq and look forward to rapidly building on that foundation."