Vital Metals Limited (ASX:VML) has entered into a binding term sheet to acquire Cheetah Resources Ltd, a private Australian company focused on identifying, acquiring and bringing rare earths projects to production.
Cheetah is the brainchild of Geoff Atkins who after five years of reviewing and assessing rare earth oxide (REO) projects globally, developed a project criteria and strategy to develop rare earth projects.
This company has subsequently assembled a pipeline of projects with substantial REO resources and potential.
Global rare earth demand has become linked to global and regional agreements, policies, regulations and initiatives and in order to meet increased demand, new annual development of rare earth mines is required from 2020.
“This acquisition is a gamechanger”
Vital Metals executive director Zane Lewis said: “This acquisition is a game changer for Vital and forms a major part of our goal of delivering significant value to shareholders.
“Our development strategy is not to compete with existing rare earth refiners but rather keep capital and operating costs as low as possible by feeding their facilities, thereby helping them expand with the growing market for rare earths.
“Our team will be significantly enhanced by the Cheetah team’s wealth of experience in the locating and bringing into production of rare earth projects.”
Agreements to acquire two REO projects
Cheetah’s business plan is to supply a high purity mixed rare earth feedstock to established third party REO separation facilities and refiners.
The plan has been designed to result in lower capex and shortened lead times to production to capture the expected increased in demand for REOs.
Lewis added: “This is an exciting opportunity for Vital to be exposed to rare earths at a time when demand is outstripping supply on the back of the electric vehicle market and the need for clean power generation.”
Cheetah also has agreements in place to acquire two substantial REO projects, including Thor Lake Rare Earth Project in Canada and Wigu Hill Project in Tanzania.
Thor Lake Rare Earth Project acquisition
Cheetah has entered into a biding term sheet with Avalon Advance Materials (TSX:AVL) to acquire the resources of the Thor Lake project with the company acquiring mineral rights to all mineralisation between surface and a depth of 150 metres above sea level.
This project has potential for a start-up operation exploiting high-grade, easily accessible near-surface mineralisation from the North T-Zone rather than focusing on the larger Upper Lake Zone.
The company plans to access options to utilise simple, mechanical sorting to produce a high-grade concentrate without the use of chemicals or water.