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TORONTO (miningweekly.com) – Rare earth alloys producer Great Western Minerals Group (GWMG) has entered into an agreement to sell the redundant manufacturing assets of its Michigan-based subsidiary, Great Western Technologies Inc (GWTI).
The GWMG board in March approved shuttering and liquidating the asset in order to reduce costs and focus on its strategy of becoming a fully integrated producer through its UK-based rare earth alloys producing subsidiary Less Common Metals, while simultaneously developing its Steenkampskraal rare-earth project, in South Africa’s Northern Cape province.
The transaction was expected to close during the second quarter and the proceeds would be used to offset a portion of GWTI's existing liabilities, which include about $1.2-million for facility restoration liability, as well as other lease and closing costs.
“This agreement provides an efficient means to sell redundant assets and reduce liabilities associated with the GWTI closing process. This also allows us to expedite the closing, which, beyond saving some lease and other operating costs, eliminates the distraction of managing the facility cleanup process so we can focus on executing our mine-to-metal vision,” company president and CEO Marc LeVier said.
Under the GWTI lease agreement, the GWMG is required to restore the facility back to its original state. In exchange for payment, the undisclosed purchaser would take on that liability, assume the GWTI lease obligations and provide employment opportunities to GWTI employees.