Meteoric Resources (ASX:MEI) has entered into a binding agreement to acquire a tier one ionic clay rare earth element (REE) project in the Minas Gerais State of Brazil.
The Caldeira Project comprises 30 licenses and has previously had significant exploration conducted including 1,311 shallow auger drill holes for 13,037m. Drilling across 6 licenses returned ‘ultra-high-grade’ Total Rare Earth Oxide (TREO) intersections, the company reports.
Meteoric will acquire the exclusive rights to explore for and develop all rare earths elements located on the 30 mining leases that comprise the Caldeira Project from family owned private company Togni S/A Materiais Refratários.
The company’ share price had a meteoric rise on the ASX this morning, skyrocketing 93.75% as of 9.15am AWST.
Under the terms of the acquisition, Meteoric has paid US$200,000 for an exclusivity period to 6 April 2023 to allow Meteoric to complete due diligence on the project. Subject to the satisfactory completion of due diligence and negotiation of formal binding transaction documents, phased cash payments of $20 million will also be made.
A royalty payment of 4.75% on minerals extracted from the project, with the purchase price of US$20 million to be credited against initial payments under the royalty.
The company’s existing cash reserves will be used to fund the payment due on completion, transaction costs including due diligence, initial exploration work on the REE project, as well as the company’s other assets, including the Palm Springs Project.
Addressing the acquisition, company Director Dr Andrew Tunks said: “The Caldeira Project is a 15km scale, ultra-high-grade ionic clay deposit which is completely open at depth and it has the potential to host large, high grade rare-earth element-ionic clays and represents an enormous opportunity for Meteoric.
“The Caldeira Project is a 15km scale, ultra-high-grade ionic clay deposit which is completely open at depth”
An extensive shallow auger program was conducted over 6 of the 30 Project licences contained within the project. Of the 1,311 holes drilled, over 85% finish with grades in excess of 1,000ppm TREO. With mineralisation commonly extending from surface down the entire length of these holes.
The deepest hole ends at 20m and the average hole depth is less than 10m. The depth of the deposit is at this stage unknown and Meteoric is preparing to mobilise a diamond drilling team to site in January 2023 to commence further exploration to better understand the Caldeira Project’s scale and depth.”
Tunks says the distribution of the rare earth elements at Caldeira is enriched in Heavy Rare Earth Elements (HREE). Additionally, the sample results to date are strongly enriched in the magnet rare earths of terbium, dysprosium, praesidium, and neodymium, which make up more that 22% of the total rare earth elemental composition.
Meteoric reports these 4 elements will be the magnetic powerhouse of the green energy transition, crucial if we are to reach global CO2 reduction targets.
Tunks adds: “There has been specialist technical evaluation of the Caldeira Project already completed, including preliminary metallurgical testwork. These studies are under review by experts, with results expected to be announced over the coming weeks.
The vendors of the project are Togni S/A Materiais Refratários, a family led private company that have been mining the clay deposits in the Poços de Caldas area for 112 years. Originally they made building bricks and roof tiles, before commencing the production of refractory products for use in furnaces and kilns in the steel, aluminum, non-ferrous metals, industrial minerals, glass and ceramics industries.
They have strong connections to the local government mining and environmental bodies due to their long history of development in the area, making them ideal business partners.
Meteoric is fully funded for its 2023 exploration activities on the Caldeira Project, owing to the sale of the Juruena Gold Project, that was announced in June 2022, with the final payment tranche of USD$17.5 million due in March 2023. Exploration activities at Caldeira will commence with diamond drilling to validate the depth extent of mineralisation, mineral resource estimation, regional target evaluation and additional metallurgical testwork.”
Tunks says it will leverage the advanced nature of the Caldeira Project and the excellent technical work already completed to further progress the project and move rapidly towards becoming a significant participant in the global rare earth industry.
Previous exploration exclusively used powered auger drilling across the Project. Clearly this drilling method was inappropriate to test the base of the mineralisation and in fact the thickness of the mineralisation remains unknown, as 85% of all completed holes end in grades greater than 1,000ppm TREO.
As part of the project due diligence Meteoric will commence diamond drilling the six previously drilled prospects in January 2023 to assess the true thickness of the mineralised regolith profile down to fresh rock. Initially this will involve completing diamond holes on a 400m by 400m grid to check the validity of the powered auger results, and ensure an accurate representation of the regolith profile.
Upon completion of the diamond drilling program, detailed infill drilling will be conducted over the highest priority target areas with fit for purpose drilling techniques. Resource estimations for the highest priority target areas are envisaged to be completed by the end of Q2 2023 to allow a preliminary economic assessment (PEA) of the project to begin.
A substantial metallurgical testwork program has been completed at SGS Geosol laboratories in Brazil. Meteoric will verify these results before releasing to the market.
Write to Adam Orlando at Mining.com.au
Images: Meteoric Resources Ltd & iStock
