Red Mountain Mining (ASX:RMX) has signed a farm-in agreement with LBM (Aust) to earn an 80% stake in the Monjebup Rare Earth Project 80km north-east of Albany, Western Australia.
According to the terms of the deal, Red Mountain will issue 40 million fully-paid ordinary shares to LBM, a wholly owned subsidiary of $6 billion battery minerals company Liontown Resources (ASX:LTR). Red Mountain will then need to spend $500,000 on exploration activities within a two-year period.
Once the 80% interest has been acquired, LBM will be issued a 2% net smelter royalty on the minerals produced and sold from the Monjebup Project, while a joint venture will be formed to carry the arrangement forward.
“This is an exciting opportunity for Red Mountain to transact with a globally recognised multi-billion-dollar Australian resource company such as Liontown”
“This is an exciting opportunity for Red Mountain to transact with a globally recognised multi-billion-dollar Australian resource company such as Liontown,” Chairman Troy Flannery says.
“The company looks forward to commencing initial exploration work on the Monjebup grounds, which has previously delivered highly anomalous soil sampling results up to 969ppm total rare earth oxide.”
The Monjebup Project sits within the Albany Fraser Orogen, which extends along the southern and south-eastern margin of the Archean Yilgarn Craton.
Sampling work by Windward Resources in 2015 discovered anomalous levels of cerium, lanthanum and yttrium, although nickel, copper, gold and rare earth elements (REEs) were not considered at the time.
In early 2022, however, Liontown applied for the tenements with the intention to explore for REE potential. Field reconnaissance and surface sampling activities were carried out, with ‘highly anomalous’ REE results received.
Red Mountain, which has a $9.08 million market capitalisation, intends to further test the Monjebup Project’s REE potential, which will likely include grid sampling and metallurgical test work.
In addition to Monjebup, the company’s portfolio includes the Lithic and Mustang lithium projects in Nevada, and the Mt Maitland gold and Mt Mansbridge heavy rare earths projects in WA, and the Koonenberry Gold Project in NSW.
