PERTH (miningweekly.com) – ASX-listed Vital Metals on Tuesday unveiled plans to pursue rare earth oxide developments through the acquisition of privately-held Cheetah Resources.
Cheetah has agreements in place to acquire the Thor Lake and Wigu Hill rare earth oxide projects, in Canada and Tanzania respectively.
The Thor Lake project could be acquired for C$5-million, and is estimated to host some 47.21-million tonnes of ore, grading 1.52% rare earth oxide.
Cheetah will also acquire the rare earth intellectual property rights at the Wigu Hill project for C$100 000, and will fund a C$500 000 work programme within six months of the grant of a mining licence. The company also has an option to acquire the remaining interest in the project for a total of C$1.1-million.
Wigu Hill is estimated to host some 3.3-million tonnes of ore at 2.6% rare earth oxide.
Under the terms of the agreement, Vital would acquire all of the issued capital of Cheetah in return for 400-million fully paid ordinary shares on completion of the transaction.
A further 400-million performance shares will also be issued, which can be converted into ordinary shares on Vital entering into a binding offtake for a minimum of 1 000 kg of contained rare earth oxide over the Thor Lake project or the Wigu Hill project, within two years of the acquisition.
A further 400-million performance shares would also become convertible on the start of mining operations at either Thor Lake or Wigu Hill.
Vital on Tuesday reported that the transaction was subject to a number of conditions, including the successful completion of due diligence investigations, shareholder and regulatory approvals, and Cheetah maintaining its rights over the two assets.
Meanwhile, Vital has agreed to provide Cheetah with an unsecured loan facility of up to A$3-million, at an interest rate of 12%, to fund the company’s obligations under its agreements with the owners of Thor Lake and Wigu Hill, and for working capital purposes.
In the event that the takeover transaction does not proceed, the loan will become payable 12 months after Cheetah’s shareholder meeting.