Lodestar Minerals (ASX:LSR) has acquired privately held Arizona Mountain Passage Heavy Rare Earths (AMP), buying into the Virgin Mountain Heavy Rare Earth Project in Arizona, US.
Purchase agreement terms comprise Lodestar issuing 100 million shares at a price of $0.025 to a total value of $2.5 million, along with 50 million options exercisable at $0.045 to expire 31 January 2029, and $450,000 in cash.
AMP holds a binding option agreement with Globex Mining Enterprises (TSX:GMX) to acquire the Virgin Mountain Project, which is prospective for a range of rare earth elements (REE), including dysprosium, terbium, and lutetium. Lodestar is required to assume agreement.
For the acquisition of the Virgin Mountain Project, Lodestar will then make a total cash payment of C$750,000 ($820,142) over a 42-month plan to Globex Mining Enterprises subsidiary Globex Nevada, along with C$600,000 in shares, issued at the five-day volume weighted average price.
Globex Nevada will retain a 3% gross metal royalty, while also receiving US$100,000 each year until the project reaches commercial production.
Lodestar is conducting a placement to raise $3.25 million, returning firm commitments from investors including Tribeca Investment Partners, S3 Consortium, and John Hancock’s Family Office.
The company will issue 130 million shares at $0.025 over two tranches, with holders eligible to acquire one option for every two shares subscribed in this placement. Options hold an exercise price of $0.045 to expire on 31 January 2029.
Oakley Capital Partners is acting as the lead manager for this placement.
Located on the border of Nevada and Arizona, Virgin Mountain contains mineralisation of all 12 elements listed on China’s export restriction log.
Previous results from due diligence work conducted at the Hummingbird prospect by Globex Mining includes 1.26% total rare earth oxide (TREO), containing 36% heavy rare earth oxide (HREO) and 20% neodymium and praseodymium, and 0.72% TREO, containing 30% HREO and 22% neodymium and praseodymium.
Lodestar Chairman Ross Taylor says the opportunity to acquire the project allows the company to expand its presence in the critical minerals landscape.
“The ground is strategically located just two horse by road from MP Materials’ (NYSE:MP) world-class Mountain Pass Mine (US$12 billion market capitalisation) – the only active rare earth producer in the USA,” Taylor says.
“One of the advantages of the Virgin Mountain Project is its high concentration of heavy rare earth elements (HREE).
“MP Materials’ Mountain Pass Mine contains extremely low concentrations of HREE, providing a unique opportunity to supply feedstock for their planned HREE facility, subject to successful exploration and development of Virgin Mountain.”
Meanwhile, the company has appointed Coraline Blaud as an Executive Director, following spending the past three years in leadership roles across the company.
Blaud has accumulated over 10 years of experience in the resources sector, previously working with Kingwest Resources as the company drove exploration from first pass to a Scoping Study.
“Her appointment strengthens our leadership team and aligns with our objective to unlock the full potential of Lodestar’s exploration assets,” Taylor adds.
Blaud is anticipated to assist the company as it advances exploration across its US, Chilean and Western Australian assets.
Write to Maddison Elliott at Mining.com.au
Images: Globex Mining Enterprises
