Oceana Metals Ltd. has agreed to acquire 100 per cent of the Serra Negra rare earths and niobium project in Minas Gerais, Brazil.
Serra Negra, a 10-kilometre-wide carbonatite complex, is the largest known alkaline carbonatite intrusion in the Alto Paranaíba Igneous Province. Geologically, Serra Negra is three times the size of the nearby Araxá complex, which famously hosts the world’s largest niobium deposit.
While the site was historically explored for phosphate and titanium, Oceana’s recent due diligence has revealed significant untapped potential for critical minerals.
Initial re-assays of historical drill core returned exceptionally high-grade results, including 8.41 per cent Total Rare Earth Oxides (TREO) at a depth of 138 metres, 8 per cent TREO at 109m and significant magnetic rare earth oxide (MREO) concentrations of up to 1.46 per cent.
Oceana Managing Director Mick Wilson described the move as a game-changer for the company.
“The Serra Negra Project will transform Oceana and give our shareholders exposure to a critical minerals project with huge scope for growth,” Wilson said.
“By obtaining this compelling rare earth and niobium opportunity, we are positioning Oceana and its shareholders to benefit from global trends in security of mineral supply, electrification and an energy transition.”
The deal is valued at up to US$10.3 million in cash and shares, plus a 2.5 per cent net smelter royalty. Deferred milestone payments are tied to the delivery of JORC-compliant mineral resources, including a US$1.5 million payment if the company defines a 100-million-tonne resource at 4 per cent TREO.
To fund the acquisition and an exploration campaign, Oceana has secured AU$20 million through a share placement at a price of 36 cents per share.
The capital will allow the company to hit the ground running with a two-pronged strategy. Approximately 8,000 metres of existing historical drill core will be immediately tested for rare earths and niobium. An accelerated 20,000-metre diamond and RC drilling program is slated to begin shortly, the first significant drilling at the site in over a decade.
The acquisition also brings fresh expertise to the company, with experienced geologist Hamish Halliday joining the board as a Non-Executive Director, and Brazilian mining executive Rodrigo Roso set to join upon completion.
With a pro forma cash position of roughly AU$17.6 million, Oceana is now well-capitalised to advance what it believes is a world-class critical minerals asset.
