Resource Base Limited (ASX:RBX) is set to acquire the 1,380km² Mitre Hill Project in the Murray Basin in a deal described by the company as a ‘tremendous addition’ to its existing projects in Western Victoria.
The deal would see Resource Base acquire 100% of Mitre Hill Pty Ltd, which owns a series of five strategic exploration license applications straddling the Victoria – South Australia border, with potential for ionic clay hosted rare earth prospectivity.
“The recent announcements of significant ionic clay hosted Rare Earths by AR3 has highlighted the immense potential of this region”
Importantly, the project’s license applications sit immediately adjacent to the Red Tail and Yellow Tail deposits (Australian Rare Earths; ASX:AR3) which contain a JORC 2012 inferred mineral resource of 39.9Mt @ 725ppm TREO.
Speaking on the news, Resource Base Executive Chairman Shannon Green said: “We are very excited to have secured multiple applications with prospectivity for ionic clay hosted rare earths in such prospective parts of Victoria and South Australia. The recent announcements of significant ionic clay hosted Rare Earths by AR3 has highlighted the immense potential of this region.”
Hunting strategic rare earths at Mitre Hill
Mitre Hill is situated within the Murray Basin near the towns of Naracoorte, Penola and Edenhope, approximately 150km from the company’s Black Range Copper Gold Project in Victoria’s Stavely Arc region.
The project’s largest license application sits on 40km of strike length on the South Australian side of the border, with potential for ionic clay hosted rare earth deposits including strategically-important heavy rare earths.
Exploration will be guided by a ‘significant’ archive of historical exploration data including drill results, government studies and small-scale private exploration. The company reports that it has received ‘firm commitments’ to raise $1.2 million via an issue of six million shares @ $0.20 to fund exploration activities including surface sampling & field mapping, auger & AC drilling, along with metallurgical & mineralogical testwork.
Rare earths have grown in significance due to their various strategic applications and Chinese-dominated supply, with the Asian powerhouse responsible for over 85% of annual global output.
Heavy rare earths, which are less-common, are critical for a number of clean technology applications including magnets used in wind turbines and electric vehicle motors, along with fibre optics and medical equipment.
Script + royalty deal
Resource Base has signed a binding term sheet with current owner Mitre Hill Pty Ltd that would see RBX purchase 100% of issued capital in the company in return for:
- 4,700,000 consideration shares
- 4,000,000 performance rights, convertible to ordinary shares, based upon grades achieved from upcoming drilling
- 1% royalty on net smelter return
- reimbursement of up to $50,000 on prior exploration costs
Consideration shares issued will remain in escrow for a period of 12 months pending granting of license applications, and the transaction is subject to shareholder approval.