REalloys (NASDAQ:ALOY) has agreed to the principal terms of a potential 75-year lease for a heavy rare earth processing facility at the US Army’s Tooele Army Depot in Utah, US.
The non-binding term sheet covers approximately 200 acres and provides for an initial 50-year lease with a possible 25-year extension.
REalloys would finance, build, operate, and ultimately decommission the facility, while the US Government would retain ownership of the land.
The proposed operation would process dysprosium and terbium, which are used in high-temperature permanent magnets for defence systems, electric motors, radar, and other applications.
The Army would receive a right of first offer over material produced at the facility, although it would not be required to make any purchases.
REalloys CEO Leonard Sternheim says the term sheet marks progress towards a definitive agreement.
“Agreeing to this term sheet with the US Army is an important step for our Tooele project as we work towards a long-term lease,” Sternheim says.
A definitive lease remains subject to environmental reviews, permitting, project financing, REalloys board approval, congressional notification, and agreement over rent and the company’s development plan.
Either party may terminate the term sheet if the outstanding conditions are not satisfied or waived within 18 months.
Other Army processing projects advance
REalloys was one of four companies conditionally selected in June under the Army’s Strategic Capital Initiatives program.
Titan Mining (TSX:TI) subsidiary Empire State Mines subsequently signed a preliminary commercial framework for a graphite processing facility at Anniston Army Depot in Alabama.
The proposed lease has an initial 50-year term and two possible 25-year extensions, as previously reported by Mining.com.au.
Meanwhile, Ioneer (ASX:INR) has completed a Prefeasibility Study for a proposed boron carbide plant at Tooele. The company is discussing a lease over approximately 50 acres and environmental requirements with the Army, but has not announced a term sheet.
Privately held Energy Exploration Technologies (EnergyX) remains conditionally selected to develop a lithium processing facility at Red River Army Depot in Texas. No later lease agreement has been disclosed.
REalloys is a US rare earth materials company developing processing and metallisation capacity in North America.
Write to France Pinzon at Mining.com.au
Main image: REalloys
