Canadian Phosphate (ASX:CP8) has executed a binding agreement to acquire 100% of the Diamond Mountain Phosphate Project from Revival Gold (TSX-V:RVG) and Utah Minerals Resources for up to US$3 million ($4.17 million).
Located 35km northeast of Vernal, Utah, the Diamond Mountain Project is adjacent to Simplot’s 4 million-tonne-per-annum Vernal Phosphate Mine and hosts an estimated 26.8 million tonnes (Mt) of measured and indicated resource.
Diamond Mountain also has an inferred resource of 23.1Mt, averaging 19.67% diphosphorus pentoxide, in a laterally continuous seam with an average thickness of 4.4m.
CEO Daniel Gleeson says the acquisition represents a “material step in accelerating the company’s strategy to become a major North American phosphate supplier”.
“The project’s scale and strategic location provide Canadian Phosphate with a significant platform for growth,” Gleeson says.
“Importantly, the acquisition complements our existing Canadian … assets and further strengthens our vision of … [a] mine-to-market phosphate business across North America.”
The company will pay US$1.5 million upfront, comprising US$750,000 in cash and US$750,000 in shares. The share component involves issuing 6,041,737 units at $0.1743 per share.
Half the shares are restricted from trading for 12 months, with the remaining half restricted for 24 months.
The company notes phosphate is classified as a critical mineral in the US, Canada, Australia, and the EU to global food supply chains and lithium iron phosphate battery applications.
Following completion, Canadian Phosphate will perform a detailed technical review of the estimate, advance exploration and resource definition programs, and evaluate development pathways.
The transaction remains subject to regulatory approvals, ASX confirmations, and assignment of the state lease.
Write to JC Villarba at Mining.com.au
Images: Canadian Phosphate
