- Vital Metals (VML) subsidiary Cheetah Resources has signed a binding term sheet for the construction of a rare earth extraction plant in Canada
- The deal was signed with Saskatchewan Research Council (SRC), which recently announced it would spend $31 million building a complementary rare earth processing and separation facility in Saskatoon
- Vital's plant would be built alongside the facility and work to produce a mixed rare earth carbonate product
- It's estimated building the rare earth plant will cost around $5.5 million in capital and, if all goes to plan, it could be operation by late 2021
- Shares in VML are trading steady at 2.1 cents each
Mineral explorer Vital Metals (VML) has begun negotiations to open a rare earth extraction plant in Saskatoon, Canada.
The company has signed a binding term sheet, through its subsidiary Cheetah Resources, with Saskatchewan Research Council (SRC) to negotiate building and operating a plant.
The deal comes after SRC and the Government of Saskatchewan signed an agreement last month to spend $31 million building Canada’s first rare earth processing and separating facility.
Vital wants to build its proposed rare earth extraction plant alongside SRC's facility, as their technologies are complementary to each other.
Specifically, Vital's plant would produce a mixed rare earth carbonate product. While, SRC's facility would use that same product for separation — meaning Vital would be a likely customer.
"Being the only rare earth project in Canada with near term production capability, co-located with Canada’s only separation facility, provides Vital the opportunity to be a cornerstone of the North America Critical Minerals Strategy," Vital's Managing Director Geoff Atkins said.
Under the term sheet, SRC and Cheetah will negotiate two separate agreements relating to both the construction and operation of a rare earth extraction plant.
If all goes ahead, the plant could begin processing operations by the third quarter of 2021 and would cost around $5.5 million in capital.
The exact agreements are yet to be defined though, as both Cheetah and SRC continue to negotiate.
Shares in Vital Metals are trading up 7.14 per cent, worth 2.3 cents each at 12:32 pm AEST.