Australian Mines (ASX:AUZ) has expanded its foothold in Brazil after executing an agreement to add 2 ‘highly prospective’ rare earth/niobium and lithium projects to its portfolio.
The company is set to purchase the Jequie Rare Earth Project and Resende Lithium Project through a binding agreement with local group RTB Geologica E Mineracao LTDA.
Alongside the purchase, Australian Mines has flagged its plans to seek shareholder approval for a name change to EcoMetal Resources.
Australian Mines, which has a $9.8 million market capitalisation, says Jequie and Resende sit in Bahia and the ‘Lithium Valley’ within the state of Minas Gerais, respectively.
Under the key terms of the acquisition, Australian Mines will pay $1.14 million to RTB Geologica E Mineracao LTDA — a cash payment of $150,000 and the issue of 90 million Australian Mines shares at a deemed price of $0.011 per share.
The company has the right to acquire the licences by paying $50,000 within 5-days of executing the term sheet.
Closing of the acquisition is subject to several conditions precedent that must be completed by the end of February 2024.
Meanwhile, Australian Mines announces it has accepted firm commitments from investors as part of an equity placement of $2.5 million. The company is now well-funded to expedite exploration in Brazil.
The company says the placement was managed by GBA Capital and resulted in bids in excess of the $2.5 million on offer. GBA Capital is expected to receive 6% of the gross amount raised under the capital raising and 20 million lead manager options.
Over 227 million new fully paid ordinary shares will be issued at $0.011 per share — a 21.4% discount to the company’s last trading price of $0.014. The shares also include a one-for-2 free attaching option at a strike price of $0.022 and an expiry date of 3 years from the date of issue.
Combined with its Sconi Project, Australian Mines notes the new Brazilian projects transform it into a company that offers its investors exposure to a diversified portfolio of battery metals.
The company reports pegmatites and occurrences of lithium indicator minerals have been flagged within both licences. No previous exploration for lithium has been undertaken on either licence.
Australian Mines Chief Executive Officer (CEO) Andrew Nesbitt says the company will continue to derisk its Sconi Project in preparation for reaching production, as well as search for a strategic player as part of its plans to form a collaborative partnership.
“Getting on-site to commence work as soon as possible on these very prospective Brazilian assets is a priority.
Leveraging the geological and regulatory skills and knowledge of our local Brazilian vendor will hopefully result not only in a top-tier discovery but positive news flow in the short-term.”
“Leveraging the geological and regulatory skills and knowledge of our local Brazilian vendor will hopefully result not only in a top-tier discovery but positive news flow in the short-term”
The Jequie Project comprises 45 mineral right claims covering a total aggregate landholding of 82,568 hectares, while the Resende Project comprises 8 mineral right claims with total aggregate landholding of 13,314 hectares.
Australian Mines is focused on decarbonising and electrifying the world through the development of sustainably and ethically sourced battery materials in Australia.
As of 30 September 2023, the company had $3.217 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Australian Mines