Altona agrees 51% acquisition of Chambe

Altona Rare Earths plc has entered into an agreement to acquire an initial 51% interest in the Chambe rare earths project in Malawi.

CHAMBE LICENCE

The news follows the start of exploration diamond drilling of four holes and reverse circulation drilling of 35 holes for total 3,000m across six targets at the company’s other project at Monte Muambe in the Tete Province, northwest Mozambique.

The Chambe acquisition will be through a joint venture (JV) agreement with Akatswiri Mineral Resources Ltd (AMR).

Exploration licence EPL0594/20 was granted on 9 September 2021 and is valid until 6 September 2024, with an option to renew.

The tenement is a large, weathered ionic adsorption clay-hosted (ionic clay) rare earth elements (REE) project covering 128 km^₂ in the Mulanje region of Southern Malawi.

Altona said that the project would be run through Akatswiri Rare Earths Ltd (ARE), into which the exploration licence is in the process of being transferred.

TERMS

An initial payment of 1 million Altona shares will be made immediately and held in escrow until the licence is transferred from AMR to ARE.

Altona will then receive 51% of the issued share capital of ARE and can increase its share to 70% subject to the fulfillment of work, expenditure and payments during the project by the company to AMR.

These include 5 million Altona ordinary shares paid over three tranches.

Altona will carry 100% of the project costs up to the completion of Phase 3 and holds a majority position on the board of ARE.

The total cash expenditure in respect of the Chambe acquisition is expected to be some £200,000.

PROGRAMME

The planned work programme comprises four phases including:

Phase 1 of orientation drilling on three targets – Chambe, Linje and Lichenya, which is due to start in November 2021.

Phase 2 will be a JORC compliant resource estimate including a scoping study for a rare earths production operation.

Phase 3 consists of a bankable feasibility study and Phase 4 is the development of a mining facility.

ESGs

The Altona-AMR JV is currently running a community engagement programme to meet village leaders and local communities over four days.

The companies will explain the benefits of the Chambe project to the Mulanje region and distribute Covid-19 prevention measures, such as face masks, hand sanitisers and washing stations.

TIME FRAME

Chief executive Christian Taylor-Wilkinson said that the agreed acquisition of Chambe gave the company two probable benefits.

“Firstly, it gives us access to REEs not typically found in carbonatite formations, as is currently being explored at our Monte Muambe project, and secondly, it enables us to realistically look at entering into production of rare earth metals in a time frame much shorter than carbonatite REE projects afford.”