West Cobar Metals (ASX:WC1) has entered into binding agreements to acquire privately held Salazar Minerals and indirectly its wholly owned subsidiary Salazar Gold, owner of the Salazar Rare Earth Element (REE) Clay Project.
With more than 8 years of exploration, metallurgical, and technical studies conducted to date, the Salazar Project, which is located 120km north-east of Esperance in southern Western Australia, is considered to be one of the most advanced clay rare earth assets in Australia.
Salazar Minerals’ Newmont deposit contains an Inferred Mineral Resource of 43.5Mt at 1192ppm total rare earth oxide (TREO+Y2O3).
West Cobar notes that the Salazar Project benefits from its proximity to essential infrastructure (including port, rail, and air services) and is well serviced with a readily available skilled local work force in nearby Esperance and other towns in WA’s Great Southern region.
The company’s share price soared almost 38.50% to $0.270 as of 10.15am AWST.
Following completion of the transaction, West Cobar intends to build on the foundation laid by Salazar Minerals and, subject to a program of work authorisation and establishing all access permissions, undertake a program of aircore drilling, which will initially be aimed at extending the Inferred Mineral Resource of the Newmont deposit (E63/1496).
West Cobar also intends to fast-track the Salazar Project by undertaking further metallurgical test work and marketing studies.
Addressing the deal, West Cobar Metals Non-Executive Chairman Rob Klug commented: “With more than 8 years of test work and studies completed, the Salazar Project offers West Cobar exposure to one of Australia’s advanced REE clay deposits in a highly desirable location.
“the Salazar Project offers West Cobar exposure to one of Australia’s advanced REE clay deposits in a highly desirable location”
The company is very pleased to have secured such an advanced rare earths project at a time when electrification of the world economy is significantly increasing the demand for rare earths minerals.”
The terms of the acquisition include West Cobar agreeing to acquire all of the issued share capital of Salazar Minerals for about 39 million fully paid ordinary shares in the capital of West Cobar.
The transaction is conditional upon, amongst other matters, the shareholders of West Cobar having approved the issue of the consideration shares to the vendors; all liabilities (actual or contingent) owing by Salazar Minerals having been forgiven or capitalised and all receivables owing to Salazar Minerals having been paid; and, Salazar Minerals disposing of three gold tenements.
West Cobar will also repay outstanding Salazar Minerals shareholder loans of about $260,000 on completion of the transaction.
Each Salazar Minerals shareholder will be subject to a 6-month voluntary escrow on the disposal of their consideration shares. Each Salazar Minerals shareholder is not a related party to West Cobar and there are no pre-existing relationships with any of the Salazar Minerals shareholders.
West Cobar will seek Shareholder Approval at a general meeting which is expected to be held in or around mid-October 2022. West Cobar will work with Salazar Minerals to satisfy the remaining condition precedent as soon as possible, which completion of the transaction expected to occur on or around late October.
Write to Adam Orlando at Mining.com.au
Images: West Cobar Metals Ltd & iStock
