Altona Rare Earths plc is to acquire its first rare earths asset after signing an exclusive acquisition deal for the Monte Muambe project in Tete Province, northwest Mozambique.
PROGRAMME
The company entered into an agreement with Ussokoti Investimentos Limitada for up to 70% of the project via a farm-in arrangement.
Altona has also started its application for environmental licensing as well as the logistical and procurement process.
The company said it planned to mobilise drilling rigs to Monte Muambe by the end of Q3 2021.
LICENCE
Ussokoti holds a five-year prospecting licence 7573L, which was granted in May 2017 and is renewable for a further three years.
The project will be run through a special purpose vehicle (SPV) controlled by the company, to which the licence will be transferred subject to regulatory approval.
TERMS
The farm-in commitments are spread over three phases.
Altona will increase its interest in the SPV subject to work and expenditures commitments as well as payments in cash and Altona ordinary shares to the original SPV shareholders.
The company will fund 100% of the project up to completion of Phase III and it holds a majority position on the board of the SPV.
| Stage | Cash Payment | Share Payment | Holding in SPV |
| On signing | 1% | ||
| Phase I | £40,000 (at start) | 1 million Altona shares (at end) | 20% |
| Phase II | £40,000 (at start) | 1 million Altona shares (at end) | 51% |
| Phase III | £160,000 (4 tranches of £40,000 over the period) | 1 million Altona shares (at end) | 70% |
PHASES
Phase I (eight months) will see a 3,000m exploration drill with a minimum expenditure of US$400,000.
Phase II (12 months) comprises in-fill drill to produce an initial mineral resource estimate for the total rare earths oxide (TREO) present. It will also include first pass metallurgy, a key parameter for REE projects, with a minimum expenditure commitment of $700,000.
Phase III (two years) will involve the preparation of a feasibility study, with a minimum expenditure commitment of $2 million.
Altona will also apply for a mining concession.
STAND-OUT ASSET
Chief executive Christian Taylor-Wilkinson added that the acquisition agreement was a milestone for the company.
“We have investigated a number of rare earths projects in Africa over the past 12 months and Monte Muambe is definitely a stand-out asset, with the potential to become a significant producer of rare earths for those industries around the world which are desperate for an alternative source of reliable and sustainable rare earth metals.”
Altona still aims to change its stock market listing from Aquis to the London Stock Exchange and to complete further acquisitions.