PERTH (miningweekly.com) – ASX-listed explorer Meteoric Resources has inked a definitive agreement to acquire the rare earths rights at the Caldeira project, in Brazil.
Under the terms of the agreement, Meteoric will pay the Tongi Group of Companies $20-million in four staged payments out to 2026, and on the start of production and subject to the advanced payment, will also pay a 4.75% royalty based on the rare earths produced at the project.
On the first four years of the proposed production, Meteoric would pay royalty on a monthly minimum of 210 t, even if production is less than this amount, and from the fifth year onward, would pay a royalty on the monthly minimum of 420 t, even if production is less than this amount.
Meteoric is expected to spend a minimum of $5-million on the Caldeira project on the first two years of the definitive agreement, and $2.5-million on the subsequent years. The initial expenditure will be focused on resources growth towards reserve, development studies and plant design.
“The signing of the definitive agreement is a significant step for Meteoric and represents several months of hard work by all parties resulting in a comprehensive document focused on the path forward for exploration and development of the Caldeira project,” said Meteoric director Dr Andrew Tunks.
“In this process, Togni and Meteoric have developed extremely strong ties which now enables Meteoric to leverage Togni’s remarkable 112-year history of mining in the area to fast-track our efforts. The technical, legal and financial due diligence is proceeding very well. On the technical front, work has focused on the ongoing diamond drilling of 26 twin holes to examine the depth potential of the rare earth element mineralisation, as well as a significant assay verification exercise where 5% of samples from the original exploration were re-assayed at an alternate laboratory. Pleasingly, the results confirm the original work was of high quality with the new results being almost identical to the original assays.”
Tunks said that the $17.5-million from the sale of Juruena gold project, also in Brazil, in March would be used to complete the acquisition of the Caldeira project, with the payment of the first $5-million instalment to Togni.
“The remaining funds, together with some A$7.5-million of in-the-money 2023 options, ensures Meteoric is well funded to hit the ground running on the exploration and development of this truly amazing Tier 1 project. We are also working hard to attract the best rare earths talent to our team to drive the project towards development.”