Hudson Resources, Inc (TSXV:HUD) shares climbed 60% to $0.04 on Monday after the company and Neo Performance Materials Inc (TSX:NEO) announced approval from the Government of Greenland for the transfer of an exploration license covering a portion of the Sarfartoq Carbonatite Complex in southwest Greenland.
Hudson said Neo has completed the purchase of the license, providing it with the agreed-upon compensation of US$3.5 million.
“This deal provides a significant cash injection to the company and importantly, also gives Hudson shareholders upside in the future value of the Sarfartoq projects through equity or additional consideration without having to contribute capital,” Hudson Resources president Jim Cambon said in a statement.
Hudson noted that it may, under certain conditions, receive additional compensation in the form of equity interests or a share of future sale proceeds.
The Sarfartoq project, which hosts a mineral deposit enriched in neodymium and praseodymium, is expected to help feed Neo’s planned rare earth permanent magnet production in Estonia for electric vehicle and energy-saving specialized motor applications markets in Europe, according to the company.
Hudson said the license covers a portion of the large Sarfartoq carbonatite complex that also hosts its ST1 rare earth elements project and the Nukittooq niobium-tantalum project.
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