Australia's Vital Metals (ASX: VML), Canada's first rare earth producer, has suspended trading until Thursday, August 12, due to reports that it is in talks to acquire two Quebec projects, one of which is believed to be the world's fourth largest rare earth project.
The company is said to be in final talks to acquire the Zues project and a 68 per cent stake in Kipawa, two rare earth assets owned by TSX-V:QPM, the precious metals company of Quebec.
The rise in the Australian mining company's share price was driven by Vital's announcement on Monday that it was actively seeking to enter the US capital market. Its shares rose 22 per cent last week and 308 per cent in the past year.
The company has hired Tectonic, Ecoban Securities Corporation's advisory services department, to promote and manage Vital Metals's securities.
As part of the deal, the Sydney-based miner will issue 10000000 three-year unlisted options to Tectonic. The exercise price of these options is $0.07 and must meet various vesting conditions.
The move comes after Vital Metal increased production at its Nechalacho rare earth mine in northwest Canada. This makes it the second producer in North America to produce magnets used in electric vehicles, aerospace, defense and electronics, after the Yamaguchi Mine in California.
Nechalacho, which began operations last month, completed its first month of rare earth production on August 6 and said it had intersected with the high-grade rare earth oxide (REO) mineralization on the north wall of the mine. This will make it possible to extend the mine beyond the existing plan.
Rare earth hot spot
Canada is rapidly becoming a hot spot for rare earths. Privately held American rare earths invested in Search Minerals Inc's rare earths project in Newfoundland, eastern Canada, in March.
American rare earths, which already control rare earth deposits in Texas, have hinted at possible expansion and cooperation with Canadian companies.
Pini Artehouse, chief executive of American rare earths, said that supply cannot be provided by projects in the United States alone, but must cooperate with Canada.
