Join our daily newsletter At The Bell to receive exclusive market insights
- Vital Metals (VML) is set to acquire Quebec Precious Metals’ 100 per cent stake in the Zeus Project and its 68 per cent interest in the Kipawa Project in Canada
- The companies have signed a binding term sheet which will see Vital pay a total of C$8 million (A$8.7 million) over five years
- The Zeus and Kipawa projects are prospective for rare earth elements and Vital believes they complement its Nechalacho rare earth operations in Canada
- Importantly, this deal has the potential to transform Vital Metals into the only producer of both light and heavy rare earths in North America
- Company shares are up 6.56 per cent to trade at 6.5 cents
Vital Metals (VML) has signed a binding term sheet with Quebec Precious Metals Corporation (QPM).
Under this deal, Vital will acquire QPM’s 100 per cent stake in the Zeus Project and its 68 per cent interest in the Kipawa Project with the remaining 32 per cent interest owned by QPM’s joint venture partner, Investissement Quebec.
Vital will pay C$8 million (A$8.7 million) for the project interests which is broken down into six payments.
The first payment includes a C$150,000 (A$163,121) deposit upon signing the term sheet which will be followed by a C$2.35 million (A$2.55 million) payment when the projects are formally acquired. The remaining sum will be paid over the next four anniversaries of acquiring the project.
The Zeus and Kipawa heavy rare earths projects are located in Quebec and are set to complement Vital’s light rare earth operations at its Nechalacho rare earth element (REE) mine in Canada.
The Kipawa Project, in particular, has a proven and probable reserve estimate of 19.8 million tonnes at 0.411 per cent TREO. The project is defined by three enriched horizons within one complex which contains light rare earth oxides but primarily heavy rare earth oxides.
The Zeus Project is known to contain 12 heavy rare earth showings, some of which contain REEs such as niobium and tantalum.
Vital Metals Managing Director Geoff Atkins said the acquisition provides the company with a unique opportunity to become a key producer of light and heavy REEs.
“The potential to develop the Kipawa project will allow us to produce a full suite of rare earths. It has the potential to increase our position as a strategic player in the North American critical minerals supply chain at a time where demand continues to grow,” Mr Atkins said.
“Further, we see the acquisition as an ideal opportunity to cement Vital’s place as a leading rare earths producer, not just in North America but globally.
“Introducing heavy rare earths into our product suite will increase the value of the rest of our offering as we will be a single supply source for both heavy and light rare earths.”
Vital plans to establish similar relationships with the Indigenous and local communities of the Kipawa and Zeus project and to use a similar technology and practices as its Nechalacho Project.
As part of the term sheet, VML will now undertake due diligence work at the projects for three months. However if it isn’t able to visit the projects within two months, it has six months from signing the term sheet to complete due diligence.
Company shares were up 6.56 per cent to trade at 6.5 cents at 12:28 pm AEST.
