- Megado Gold (MEG) in bid to acquire the North Fork rare earths project in the US through a combination of shares and options to Felix Strategic Minerals
- North Fork, in the US state of Idaho, is known to host REE mineralisation enriched with critical rare earths
- Megado Gold says the project is a “tremendous opportunity”, especially due to the US government focus on REEs for its clean energy transition and national security mission
- The transaction is expected to be completed by the end of May and MEG plans to raise $2.4 million through a placement to fund initial exploration work
- Company shares are up 81.8 per cent and trading at 20 cents
Megado Gold (MEG) shares have spiked today after the miner announced it has entered a definitive agreement to acquire Felix Strategic Minerals whose wholly-owned subsidiary owns the high grade North Fork rare earths project.
The North Fork project comprises up to 499 claims which cover a combined 4,171 hectares in the Idaho cobalt belt in the US.
It hosts seven historical prospects which include the Silver King, Cardinal, Jackpot, Radiant, Monazite Queen, and Upper and Lower Lee Buck prospects.
North Fork is known to contain multiple carbonatite-hosted, high-grade rare earth element (REE) mineralised veins over 10 kilometres of strike.
The REE mineralisation observed at the project is enriched with critical rare earths (CREE) which typically include neodymium, praseodymium, dysprosium, terbium and yttrium.
Previous exploration at the project reportedly returned “exceptional” grades such as two metres at 10.3 per cent total rare earth oxides (TREO) including 1.2 per cent CREE and 1.52 metres at 17.7 per cent TREO.
Megado Gold Managing Director and CEO Michael Gumbley said the North Fork project is a “tremendous opportunity” for the company and an “incredible addition” to its portfolio.
“The US government has designated rare earth elements as strategically critical and thus made domestic production integral to its clean energy transition and national security,” Mr Gumbley said.
“We are excited that Megado will benefit from the accommodating political climate, the welcoming Idaho jurisdiction, an existing strong US investor base, and obvious drill-ready targets to commence exploration upon finalisation of the North Fork acquisition.”
Megado Gold will pay Felix Strategic Minerals 32 million MEG shares and five million options exercisable at 15 cents until December 31, 2024. The company will also reimburse up to $700,000 worth of incurred expenses.
The transaction is conditional on Megado receiving shareholder and regulatory approvals which are expected to be obtained by the end of May.
In addition, MEG plans to raise $2.4 million through a placement to fund initial exploration activities. The placement will include the issue of 30 million shares at 8 cents each. The placement is subject to shareholder approval.
Company shares were up 81.8 per cent on the back of this news to trade at 20 cents at 11:52 am AEST.