Union Star Metals (ASX:USM) has signed a binding agreement to sell its Brazilian rare earth portfolio to Harvest Minerals (LON:HMI) for $200,000 in cash and 40 million Harvest shares.
The transaction will see Union Star divest 100% of its interest in Scanty Mineração, with further deferred payments of $100,000 upon declaration of a qualifying mineral resource and $200,000 upon achievement of the first development milestone.
Harvest will also assume Union Star’s remaining obligations to the original Scanty vendors, including about $1.5 million in deferred consideration and associated royalty obligations, through a novation deed.
Union Star says the sale forms part of its broader portfolio rationalisation as it focuses on precious metals in the US. The exploration company previously disposed of the Leonora Gold Project and entered an option agreement over the Kalgoorlie Project, both located in Western Australia.
CEO Lucas Stanfield says the transaction allows Union Star to focus its resources on its US portfolio while maintaining exposure to the Brazilian assets through its equity position in Harvest and future milestone payments.
“The sale of Scanty represents another important milestone in Union Star’s strategic transformation,” Stanfield says.
“Over the past 12 months we have systematically simplified the company’s portfolio, divested non-core assets, and repositioned Union Star as a focused precious metals explorer centred on Nevada.”
Completion remains subject to customary conditions, including execution of the novation deed, Brazilian regulatory approvals, any required shareholder and regulatory approvals, amendments to royalty arrangements, and other third-party consents.
Union Star says technical work at its flagship Cobb Creek Project in northern Nevada has identified multiple drill targets ahead of a maiden drilling program.
The project is located on the Independence Trend, north of Western Exploration’s (TSX-V:WEX) Aura Project and south of First Majestic Silver’s (TSX:AG) Jerritt Canyon Gold Mine.
Union Star’s portfolio also includes the Colorado Gulch and Silverstar projects in Idaho, US.
Write to France Pinzon at Mining.com.au
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