Altona Rare Earths plc has decided against exercising its option to acquire 51% of Leadway Group Ltd because it was unable to complete due diligence on the Nankoma project in Uganda.
The company today said that Nankoma, a greenfield project, was considered a low-interest acquisition target by the board because there was no historical exploration data available.
Altona will instead focus on the Monte Muambe project in Mozambique and continue its strategy to look for other suitable projects in Africa.
“The initial rationale for making this possible acquisition, in August 2020, was due to the tenement’s immediate proximity to a highly successful ionic-clay bearing REE [rare earth elements] project lying to the north,” said Altona in a statement.
“However, the initial desktop exploration work carried out by the company has shown that the continuity of mineralisation from the neighbouring tenement into the Nankoma tenement is insufficiently proven and that the characteristics of the Nankoma tenement are insufficiently favourable to justify further cost and exploration, in the company’s opinion.”
Altona added that due diligence was not completed due to licence owner Leadway being unable to secure an export permit for soil samples collected during January 2021.
Without the results of the soil samples analysis, Altona decided not to proceed with the acquisition.