Appia Rare Earths & Uranium Corp announced it has signed a letter agreement with 3S LTDA and Beko Invest Ltd to acquire up to a 70% interest in the Cachoeirinha (PCH) project in Goiás State, Brazil.
The company said the project is 17,551.07 hectares and is classified as an alkaline intrusive rock occurrence with highly anomalous rare earth element (REE) and niobium mineralization.
The positive results of recent geochemical exploration work indicate the potential for REE and niobium within lateritic ionic adsorption clays, Appia said.
READ: Appia reports wide mineralization at Wilson Zone and expands underlying AMP Zone at Alces Lake project in Saskatchewan
Appia president Stephen Burega noted that ionic adsorption clays are the main source of the critical rare earth permanent magnet metals, dysprosium and terbium. He added that China essentially controls the production of these metals.
“The best hope for non-Chinese manufacturers of rare earth permanent magnets for military and civilian use in high temperature (cycling) environments is the discovery and exploitation of ionic adsorption clays not under Chinese control,” he said.
“This has already occurred in Brazil, where an American-owned private company is bringing an ionic clay deposit into production. Its plan is to produce some 2000 tons per annum (tpa) of the core magnet metals, neodymium and praseodymium, and 200 tpa of dysprosium by the end of 2026."
Appia CEO Tom Drivas added: “A new discovery of an ionic clay deposit in Brazil would be one of the most important events in non-Chinese rare earth sourcing in the last several years."
Letter agreement terms
Appia said it has the option to earn a 60% interest in the property by issuing an aggregate of 2.5 million common shares of Appia to Beko and spending US$10 million on the property over a period of five years.
If Appia earns its 60% interest, it will then be obligated, within 90 days of earning its 60% interest, to issue a further US$1,250,000 of common shares of Appia to Beko to earn a further 10% interest, the company said.
Upon earning a 70% interest, Appia will grant to Beko a 1% net smelter returns royalty (NSR) in the property. Appia will have a right of first refusal to acquire the 1% NSR.
The company said that thereafter, Appia and Beko will enter into a joint venture with respect to the further exploration and development of the property with Appia holding a 70% interest and Beko holding a 30% interest.
The company said it will take the next 90 days to complete its due diligence on the properties prior to finalizing this option agreement.
Appia Rare Earths & Uranium is a publicly traded Canadian company in the rare earth element and uranium sectors. The company is currently focusing on delineating high-grade critical rare earth elements and gallium on the Alces Lake property, as well as exploring for high-grade uranium in the prolific Athabasca Basin on its Loranger, North Wollaston, Eastside and Otherside properties.
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