Reach Resources Ltd (ASX:RR1), formerly Cervantes Corporation Ltd, has entered into a conditional Binding Heads of Agreement to acquire Skyline Resource Corporation Pty Ltd which holds exploration licence application ELA 09/2643, thought to be prospective for monazite hosted rare earth elements.
The tenement is hosted within the Gifford Creek Ferrocarbonatite Suite in the Gascoyne Province of Western Australia, 20 kilometres east of Hastings Technology Metals Ltd (ASX:HAS)’s Yangibana Rare Earth Element (REE) Project and covering 247 square kilometres.
Reach Resources believes the tenement has high potential to host a commercial REE assemblage with low radioactivity ore characteristics.
“Exploration upside potential”
Reach Resources chairman Robert Downey said: “The acquisition of Skyline Resources represents an exciting exploration opportunity in a region that is highly prospective for monazite hosted rare earth deposits.
“Previous work conducted in the area has outlined an extensive mineralised system where shallow near-surface exploration has the potential to delineate shallow JORC resources, offering the company what we believe to be excellent exploration upside potential.”
Key terms of proposed transaction
Reach Resources proposes to acquire 100% of the issued capital of Skyline Resources Corporation Pty Ltd from Bath Resources Pty Ltd, which is not a related party of the company.
The consideration payable for the proposed acquisition is $20,000, which constitutes the acquisition cost of applying for the tenement area.
Completion of the proposed acquisition is subject to final due diligence which is to be completed by Reach Resources within the next 20 days.
Proposed exploration
On completion of the acquisition and granting of the tenement, RR1 will complete a review of all historic exploration data and the geologic models applicable to the area.
Focused field reconnaissance, including targeted surface geochemical sampling, will be undertaken by the company prior to drilling target identification and prioritisation.
Monazite hosted REE deposits
Of all known rare earth elements, about 50% are hosted by carbonatite related deposits, of which monazite is one of the more important REE minerals.
Monazite dominates more than 30 carbonatite-related REE deposits around the world, including currently exploited mineralisation at Yangibana and Mount Weld.
REE as critical minerals
Rare earth elements have become increasingly critical to industrial production and innovation in technology, being essential to the new age of corporations, nations and households reducing their carbon footprint to meet carbon targets and ultimately carbon neutrality.
The increasing awareness and scrutiny associated with the ethics of mineral sourcing such as environmental impact and social impacts further fuels interest in, and demand on, mineral supply chains.
This has been seen in recent EU battery regulations changes and industry-led cobalt traceability measures and are prime examples of ethical awareness affecting supply chain demand.
Given REE magnets are used heavily in low-emissions technologies such as wind turbines and EVs; forecasted demand is expected to grow.
Over the next 10 years, the average annual growth in the price of magnet metals until 2030 is projected to be 8-9%.
The global rare earths market was estimated to be roughly US$2 billion in 2020 and is forecast to grow to around US$12 billion by 2030, averaging about 16% growth per annum.
