viewAmerican Rare Earths Ltd

Broken Hill Prospecting implements funding package to accelerate US rare earth development


As part of its new focus on rare earths and the US, the company is proposing a name change to American Rare Earths Limited.

Broken Hill Prospecting Ltd - Broken Hill Prospecting implements funding package to accelerate US rare earth development

Quick facts: American Rare Earths Ltd

Price: 0.12 AUD

Market: ASX
Market Cap: $34.91 m

Broken Hill Prospecting Ltd (ASX:BPL) is taking steps to accelerate the development of the La Paz Rare Earth Project in Arizona, USA, including implementation of a new funding package.

This package includes the $6.2 million to be earned over the next five years from the sale of its interest in the Thackaringa Cobalt Project as well as a capital raising of up to $2.49 million.

It is BPL’s intention through the funding package to update the commercial potential of La Paz by progressing the project to scoping study, utilising the NI 43-101 resource with the potential to convert to JORC 2012 standards.

Possible name change

As the company shifts its primary focus to this project, it is also considering a name change and has secured the name American Rare Earths Limited to support this.

CEO Trangie Johnston said, “Our La Paz acquisition has been pivotal in the company’s development, establishing its entry into the lucrative USA rare earths market and securing BPL the enviable position of the only listed ASX company with an advanced project and exposure to this market at a time when the USA is in critical need of rare earths.”

Sale “creates a baseline”

He said, “The sale of Thackaringa to our JV partners COB allows us to earn $6.2 million over the next five years which creates a baseline for the company’s corporate expenditures moving forwards, allowing any future capital raises to be focused entirely on the further development of La Paz.

“Supporting this we are looking to raise up to $2.49 million through a renounceable offer to eligible shareholders of which funds raised will be used to progress La Paz to produce a scoping study level economic assessment.”

BPL intends to put in place a separate American focused management team to ensure the successful development of the La Paz project led by a local team.

Board renewal

The company is undertaking a board renewal and will look to appoint additional expertise with American knowledge.

BPL will control the costs and expenses of the American based business to ensure maximum dollar investment in the project itself.

From a US perspective, the search for and development of rare-earth deposits, particularly at home on USA soil, has been identified as being strategically essential and has strong government support.

Highlighting this is the recently announced partnership between the USA and Australia to address the crucial supply issues, which will see the two countries work together to develop critical mineral assets, referred to as the Action Plan for Critical Minerals.

Pro rata offer

BPL is seeking to raise up to $2,491,251, before costs, through a renounceable pro-rata offer of new shares to eligible shareholders.

They are invited to apply for one new share for every one share held at the record date of 7pm (AEDST) on Thursday, December 12, 2019, at the offer price of 1.5 cents per new share.

This also includes the issue to each eligible shareholder who subscribes for new shares with one loyalty share for every eight new shares successfully subscribed for.

These must be continuously held by the eligible shareholder up to and including the date which is 12 months after the date of issue of the new shares.

La Paz plans

Proceeds will be used for these purposes at the La Paz project:

  • Assess upgrading the current NI 43-101 resource estimate to JORC 2012 standards;
  • Commence detailed metallurgical test work programs;
  • Complete a scoping study level economic assessment; and
  • Working capital.

Australian assets

While US rare earths will be the primary focus, the company maintains its Australian portfolio of projects in Broken Hill and the Murray Basin.

In the Murray Basin, BPL continues to seek partners to assist in the development of its large heavy mineral sands (HMS) tenement portfolio.

Active discussions are being held with a number of international groups seeking secure long-term supplies of HMS due to increasing demand for the production of titanium and zirconium.

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