Altona Rare Earths (ANR ) is set to acquire up to 70% ownership in the Monte Muambe Rare Earths project, the group’s first asset in the rare earth elements ("REE") mining sector.
The Aquis-listed rare earths exploration and mining company told investors that it has entered into an agreement with Ussokoti Investimentos Limitada ("Ussokoti") to acquire up to 70% ownership of the Monte Muambe Rare Earths Project, via a farm-in arrangement.
Ussokoti is the holder of Prospecting Licence 7573L, which was granted back in May 2017. The licence can be renewed for a further three years, on its expiry in May 2022, it explained.
The project will be run through a Special Purpose Vehicle ("SPV") controlled by Altona, to which the licence will be transferred. As part of the deal, the Company will increase its interest in the SPV subject to the fulfillment of work and expenditures commitments, as well as payments by Altona in cash and Altona ordinary shares, to the original SPV shareholders.
The Company said it will bear 100% of the project costs up to completion of Phase 3 (which after two years, will entail the preparation of a feasibility study, with a minimum expenditure commitment of $2m), and holds a majority position on the board of the SPV.
Historical data from exploration work carried out between 2010 and 2012 indicates that REE mineralisation at Monte Muambe is at least partly bastnaesite-hosted, and that individual REE intercept grades reach up to 4.1%, with significant intercepts including 49m at 2.51% Total Rare Earths Oxide ("TREO") from the surface, 36m at 2.53% TREO and 96 m at 2.2% TREO.
Data also points to the project’s potential to host a REE deposit amenable to open pit mining. To date, five targets have been defined by Altona for first pass drilling at the site.
Initial exploration work will focus on the extensions of known mineralised zone extensions and identifying new ones in the yet unexplored parts of the licence ‘while ascertaining the basic metallurgical characteristics of the ore, which is essential for REE projects,’ it noted.
Altona said it has undertaken the environmental licensing process as well as logistical and procurement matters and expects to mobilise drilling rigs to the site by the end of 3Q21.
Christian Taylor-Wilkinson, CEO of Altona, said, "This is a major milestone for Altona and its shareholders. We have investigated a number of rare earths projects in Africa over the past 12 months and Monte Muambe is definitely a stand-out asset, with the potential to become a significant producer of rare earths for those industries around the world which are desperate for an alternative source of reliable and sustainable rare earth metals.”
The Company said it is currently pursuing a change of stock market listing, from Aquis to the London Stock Exchange, which it believes will bring “major advantages” to its acquisition programme, as well as benefiting the development of its rare earths mining projects.
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Earlier this month, Altona initiated a new target generation programme across four countries - Mozambique, Angola, Tanzania and Uganda - with the intention of enhancing its strategy of becoming a developer of multiple African rare earths mining projects.
Altona highlighted to investors that it is in the process of listing on the Official List of the LSE, via a Standard Listing, which it said expected to be achieved by September 2021.
The company describes the listing as a “strategic move” that will enable interested parties to make an investment in Altona as it starts to progress its projects to the next stage.
Reasons to ANR
Altona Rare Earths is an Aquis-listed mining exploration company which is focused on the evaluation, rapid development and extraction of Rare Earth Element (REE) metals in Africa.
During the year to 31 June 2020, Altona closed a significant 15-year chapter on its Australian coal exploration activities and opened the door onto its new Rare Earth Metals mining strategy, which it believes “has far greater relevance for the world in the 21st Century.”
The past two years has seen a major global shift in the mind-set of rare earth metals end-users, these being primarily the manufacturers of, inter alia, high-strength permanent magnets for the electric vehicle market, military hardware and green power sectors.
Presently, China controls between 90-95% of the supply chain and crucially, also controls the refining and processing sectors, creating a worldwide bottleneck. It also controls more than 70% of EV battery manufacturing, which means a rise in cost of vehicles due to inflated REE prices could cause a significant delay to one of the world's major "Green Solutions".
Global governments are becoming increasingly aware that to increase the numbers of cars on the road, vehicles must be priced suitably. Since there are no viable alternatives to provide the huge quantities of the technology metals, REE mining firms are turning to Africa.
In theory, the company stated that rare earths mining companies in Africa could develop and start supplying Technology Metals to the world's green industries in under three years.
The Company believes it is now poised at the juncture of a significant opportunity within the rare earth metals sector which the group hopes to capitalise during this year and beyond.
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