Australian exploration company Meteoric Resources (ASX:MEI) has signed a definitive agreement with Togni S/A-Materiais Refractários and its various subsidiaries (Togni Group) to acquire the Caldeira Rare Earth Element (REE) Project in Brazil.
The agreement will grant Meteoric the exclusive rights to explore, develop, and mine the REE minerals on the 21 mining licences and 9 mining licence applications that comprise the Caldeira project. Togni has agreed to assist by securing all licences, permits, and any other form of permission required to progress Caldeira.
For these rights, Meteoric will make 4 advance payments of US$5 million to Togni over 12-month intervals from 10 April 2023 to 2 April 2026.
Upon production beginning and subject to the advance payments, a 4.75% royalty based on the rare earth oxide (REO) value benchmarked by the free on board (FOB) China price published in the Metal-Pages service provided by the Argus Metals publication will be paid to Togni.
Meteoric will pay this royalty based on a minimum of 210 tons per month (tpm) during the first 4 years of production. It will still be required to pay the royalty if the minimum amount is not met. From the fifth year onwards, Meteoric will pay the royalty on a monthly minimum of 420tpm even if production is less than this amount.
The company is currently building out its management and technical team in readiness to complete the acquisition, which is set to occur immediately following receipt of the US$17.5m it will receive from the Juruena sale on 31 March.
As part of the agreement, Meteoric will also spend a minimum of US$5 million on the Caldeira project in the first 2 years, and US$2.5 million in subsequent years. Initial expenditure will be focused on driving resource growth towards reserves as fast as possible through metallurgical testwork, development studies, and plant design.
Any annual expenditure over the minimum amount will also be carried over to the following years.
Meteoric will begin production within 4 years, however should it fail to achieve this, it will make royalty payments of $600,000 per month which will be deemed as advance payments for the royalties. The agreement will also be terminated if Meteoric has not begun production after 8 years.
Commenting on the agreement, Meteoric Resources Director Dr Andrew Tunks says: “The signing of the definitive agreement is a significant step for Meteoric, and represents several months of hard work by all parties resulting in a comprehensive document focused on the path forward for exploration and development of the Caldeira project.
“In this process Togni and Meteoric have developed extremely strong ties which now enables Meteoric to leverage Togni’s remarkable 112-year history of mining in the area to fast track our efforts”
In this process Togni and Meteoric have developed extremely strong ties which now enables Meteoric to leverage Togni’s remarkable 112-year history of mining in the area to fast track our efforts.
The technical, legal, and financial due diligence is proceeding very well. On the technical front, work has focused on the ongoing diamond drilling of 26 twin holes to examine the depth potential of the REE mineralisation, as well as a significant assay verification exercise where 5% of samples from the original exploration were re-assayed at an alternate laboratory.
Pleasingly, the results confirm the original work was of high-quality with the new results being almost identical to the original assays.
The US$17.5 million from the sale of Juruena on 31 March will be used to complete the acquisition of the Caldeira project, with the payment of the first US$5 million installment to Togni. The remaining funds, together with about $7.5 million of in-the-money 2023 options, ensures Meteoric is well funded to hit the ground running on the exploration and development of this truly amazing tier one project.
We are also working hard to attract the best rare earths talent to our team to drive the project towards development.
Geological modelling for the estimation of a maiden JORC mineral resource for the Caldeira project is well underway. Senior representatives of Meteoric met with the Resource Group BNA Mining Solutions in Belo Horizonte, Brazil, recently to review the work, which is progressing very well and we anticipate the resource will be available to the market in late April.”
Meteoric Resources is an Australian exploration company targeting orogenic gold in Western Australia, and REEs in Brazil. The company’s portfolio includes the Palm Springs Gold Project, and a 15% interest in the Webb Diamond Joint Venture (JV) with private company CGN Resources in Western Australia, as well as the Warrego North IOCG Project in the Northern Territory.
Images: Meteoric Resources NL
