Zenith Minerals Limited (ASX:ZNC) has signed a binding but conditional agreement that grants unlisted company WA Rare Earths Pty Ltd (WRE) an option to acquire 80 per cent legal and beneficial interest in a rare earth element (REE) project portfolio held by Zenith.
Zenith’s REE portfolio includes 6 granted exploration licences and 2 exploration licence applications in Western Australia, covering a total of about 1,400 square kilometres.
Subject to certain conditions, Zenith will receive $2 million worth of fully paid ordinary shares in the capital of WRE, as at completion of an initial public offering, and retain a 20 per cent free carried interest in the REE portfolio, until such time that WRE announces to the ASX a bankable feasibility study on any portion of the REE portfolio.
Historical exploration activity on the REE portfolio including surface sampling and minor drilling indicates the tenure is prospective for REE’s.
Peak surface samples returned values up to 1832ppm total rare earth oxides (TREO), while very limited historical aircore drilling that was undertaken for diamond exploration returned light REE results up to 1,140ppm (cerium oxide + lanthanum oxide) based on only a few selected REE samples per drill hole (heavy and magnet REE were generally not analysed).
The target is near surface, REE mineralisation hosted in clay, with the mineralisation model being “ionic adsorption clay REE’s”, like Chinese deposits that are currently being mined.
Zenith Executive Chair David Ledger said the company was pleased to be working with the WRE team to provide Zenith shareholders additional exposure to the critical minreals market with a focus on Western Australian REE exploration assets.
Ledger added: We look forward to WRE completing this transaction and advancing these prospective REE projects at a time of considerable interest in this sector.
“The deal allows the Zenith technical team to remain focused on exploring and expanding its core lithium portfolio and the advancement of its highly prospective gold projects.”
