PERTH (miningweekly.com) − ASX-listed explorer Forge Resources on Wednesday confirmed it had agreed a deal with rare-earths miner Lynas to buy and potentially develop the Crown polymetallic deposit, at the Mount Weld project, in Western Australia.

Forge would sub-lease the designated areas within the Mount Weld mining lease, including the Crown and Swan deposits, which Lynas considers as noncore assets.

These deposits contain tantalum, niobium and phosphates.

Forge would pay Lynas A$20,7-million in cash, and a further seven-million options to acquire Forge shares over five years.

If the Crown and Swan deposits were developed, Lynas would also have the right to purchase any rare earths produced as by-products, at no associated development costs to Lynas.

The rare-earths miner would also have the first right of refusal to take delivery of any rare earths from other mineral deposits which Forge may acquire.

Meanwhile, Lynas shareholders would receive priority entitlement in Forge’s planned A$31-million capital raising to fund the acquisition, as well as working capital and project development costs.

Forge’s key resource focus for the Crown deposit would be niobium, while the company would explore for phosphate within the Swan deposit.

Lynas said that in addition to strengthening the relationship between the two companies, the transaction would allow it the opportunity to participate in the risks and rewards of Forge.

The Crown deposit is estimated to contain an indicated and inferred rare-metals resource of 37,7-million tons, at 1,07% niobium oxide, while the Swan deposit contains an indicated and inferred resource of 77-million tons, at 13,5% phosphate.

Forge would undertake additional drilling, metallurgical test work, engineering studies and feasibility studies to test the commercial viability of the projects.

The transaction was subject to regulatory and shareholder approval, at meetings planned for later this year.

Lynas said its independent directors would recommend shareholders vote in favour of the transaction, subject to the independent expert opining that the transaction was fair and reasonable.

The transaction was also subject to Forge successfully completing its proposed capital raising.

 

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