Heavy Rare Earths (ASX:HRE) has entered into a binding term sheet with Havilah Resources (ASX:HAV) to expand its rights to all minerals including tin on the Prospect Hill Project in South Australia.
This latest agreement builds on the existing deal with Havilah, in which Heavy Rare Earths is earning an 80% initial interest in the uranium mineralisation rights on the project area.
Under the deal, Heavy Rare Earths is required to spend $1.5 million on expenditure on non-uranium minerals within three years, including $350,000 in the first year.
As part of this expenditure obligation, Heavy Rare Earths is required to drill a minimum of 2,500m during the first 18 months and a minimum of 1,250m in the second 18 months of the three-year earn-in term.
Once the 80% interest is earned, a joint venture (JV) will be formed and Havilah will be free-carried until the completion of a Bankable Feasibility Study (BFS) on any non-uranium mineral deposit covered.
Upon completing the BFS, Havilah will have the right to contribute its 20% pro-rata share of all future JV expenditure or otherwise dilute to below a 10% JV interest and receive a 1.5% net smelter return royalty on all production.
Non-executive Chairman John Byrne says this transaction benefits both parties, and the company is excited about the advanced opportunity on offer at the South Ridge tin prospect.
“This transaction offers the potential for Heavy Rare Earths to move quickly to advance studies on the small-scale extraction of tin,” Byrne says.
Meanwhile, Havilah Technical Director Chris Giles says the company is confident that Heavy Rare Earths will conduct competent exploration for tin and other minerals at Prospect Hill.
The agreement with Heavy Rare Earths is a way for Havilah to potentially monetise the project’s appreciable tin potential, for which it is currently receiving neither inherent market recognition nor any value,” Giles says.
The Prospect Hill Project, covering 75km2, has tin present as cassiterite and this will be the initial focus of Heavy Rare Earths non-uranium exploration and development activities.
Heavy Rare Earths is a uranium and critical minerals explorer and developer focused on its asset portfolio in South Australia and Western Australia.
Havilah Resources is a strategic mineral explorer focused on its multi-commodity resource portfolio within Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Havilah Resources
