Australia's Vital Metals (ASX: VML), Canada's first rare earth producer, is acquiring a 68 per cent stake in TSX-V: QPM's Zeus project and Kipawa's heavy rare earths assets at an estimated cost of C $8 million (US $6.4 million).
Under the agreement, Vital will pay QPM the total amount in six installments when certain milestones are reached.
The first C $150000 has been transferred and the second C $2.35 million will be paid at the time of the formal acquisition of the project. Vital will transfer the remaining amount within the next four years of the asset acquisition.
, Vital Metals shares soared to A $0.072 in morning trading on the news, closing up nearly 10 per cent at A $0.067. The stock rose 22% last week and 308% last year.
The company announced on Monday that it would actively seek to enter the US capital market through an agreement with Tectonic, the consulting services arm of Ecoban Securities Corporation.
QPM completed the details of the rumored deal that took place on Wednesday.
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The Zeus and Kipawa heavy rare earth projects will complement Vital's light rare earth business at its Nechalacho mine in northwest Canada.
In particular, the confirmed and possible reserves of the Kipawa project are estimated at 19.8 million tons, with a TREO of 0.411%. The project consists of three enrichment layers in a complex containing light rare earth oxides but mainly heavy rare earth oxides.
Zeus contains 12 heavy rare earths, including niobium and tantalum.
"the potential of developing the Kipawa project will enable us to produce a full range of rare earths," Geoff Atkins, managing director of Vital Metals, said in a statement. At a time when demand continues to grow, it has the potential to enhance our position as a strategic player in the supply chain of key minerals in North America. "
"in addition, Kipawa is the only rare earth project in the world directly invested by Toyota, with an initial stake of 49% of NPI converted to 10% of NPI in 2014," Geoff Atkins said. "
As the company began to increase production of its Nechalacho rare earth mine, important acquisitions followed. 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.
Mr Atkins said Wednesday's deal was an ideal opportunity to consolidate Vital's position as a leading producer of rare earths in North America and the world.
