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project|resources

China’s Shenghe takes stake in troubled Vital

27th October 2023

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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China-based rare earths company Shenghe Resources has agreed to take a cornerstone stake in troubled rare earths developer Vital Metals, which owns the Nechalacho project in Canada’s Northwest Territories.

Shenghe has agreed to subscribe for 9.99% of the issued share capital in ASX-listed Vital at A$0.01 a share to raise A$5.9-million.

Subject to its election and Vital shareholder approval, the Chinese group could subscribe for a further 492-million shares at A$0.015 a share, which if exercised would raise about A$8.9-million.

The investment would enable Vital to establish a new leadership team and to progress development of the large-scale Tardiff deposit at Nechalacho.

Shenghe CEO Wang Xiaohui commented that the Tardiff deposit had the potential to be a world-class large scale and long-life rare earth project.

Shenghe’s investment in Vital also affords the China-based company exposure to Vital’s Wigu Hill project, in Tanzania.

Shenghe will acquire an initial 50% interest in Wigu Hill and will have an option to earn up to 75% ownership by sole funding a preliminary feasibility study.

Richard Crookes is currently interim chairperson of Vital. The firm recently appointed Lara Iacusso its CFO and Geordie Mark its MD and CEO. 

Edited by Creamer Media Reporter

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