Strategic Minerals Plc (LON:SML) is to take full control of Central Australia Rare Earths, the company that own the Hanns Camp prospect in Western Australia.
John Peters, Strategic’s managing director, said CARE’s tenements will need extra funding to explore fully, something it can provide from its booming Cobre tailings business in New Mexico.
"Under existing arrangements, SML was due to move to a 75% ownership of CARE. However, it has become clear that to fully explore the resource potential indicated in CARE's tenements, larger amounts of funding would be required.
WATCH: Strategic Minerals 'takes bull by the horns' with full control of CARE
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“While the profitability of operations at our Cobre plant in New Mexico, USA has provided SML the capacity to provide such funding, Rarus may have struggled to source suitable funding in the timeframe SML envisaged for the project.
“Accordingly, SML was not prepared to expand the exploration scope while not in full control of the project's expected timeline.”
Partner Rarus will receive £522,500 worth of shares in SML for its 50% stake in CARE while Andrew Spinks, the geologist associated with Rarus, will continue to work on its various projects.
Nickel was the original target at Hanns Camp, but recent analysis showed significant cobalt readings, an element that is predicted to be in great demand as the use of electric cars grows.