Altona Energy to acquire 70% interest in Nankoma Rare Earth Project
has signed a non-binding Heads of Agreement to acquire a 70% interest in the Nankoma Rare Earth Project, a greenfield mining project in Uganda.
The Rare Earth Element (“REE”) mining exploration company which operates in Africa will acquire its stake from Leadway Group. The tenement covers an area of 67.5 km2 and is located around 50 km east of Jinja, which lies 130 km east of Kampala in Eastern Uganda.
The group explained that should a binding agreement be entered into; Altona will be responsible for 100% of the agreed budgeted costs to complete a Feasibility Study on the establishment of commercial scale REE mining and processing operations at the project site.
Altona said its rationale for the acquisition is based on the close proximity of the tenement to ASX-listed Ionic Rare Earth’s (IonicRE) REE exploration project, which lies immediately to the north-west of the Nankoma tenement and has a similar geology and geomorphology.
IonicRE reported a mineral resource estimate of 78.6 Mt @ 840 parts per million total rare earth oxide on its Makuutu Central Zone in June, which it is currently extending to the east.
‘Crucially,’ the group said, ‘IonicRE reported high levels of Critical Rare Earth Oxides at 310 parts per million, which include the elements, Neodymium and Praseodymium, two of the REEs which Altona is focused on extracting, due to their demand in many green industries.’
Shares in Altona Energy have traded off lows of 15.0p over the past two weeks to trade at 18p in early morning dealings.
Altona intends to embark on drilling target generation using Uganda’s airborne geophysical survey datasets as well as Shuttle Radar Topography Mission (SRTM) and multi-spectral satellite imagery, and ground proofing, including preliminary assaying and leach tests.
If signed, Altona will pay a total of £0.725m ordinary shares in five tranches, determined by the completion of various milestones, with the expectation that the final tranche of £0.175m will be paid within three years, on the completion of a pre-feasibility study.
The first share payment of £0.025m due 21 September 2020 will be paid at the current suspended price of 9.5 pence and provides Altona with a period of exclusivity until 30 November 2020, to complete its legal and technical due diligence on Leadway Group.
“This new deal with Leadway Group for the potential acquisition of the Nankoma project marks the entry of Altona in a nascent Ionic Clay REE play in a stable African jurisdiction with an exciting geology,” said Cedric Simonet, Consultant Geologist of Altona Energy.
He added, “The envisaged geological model is straightforward and well understood from work done by Ionic RE in the neighbouring licences, supporting a short exploration and development timeline.”
“We are developing a strategy which we believe will reduce the risk for investors and shareholders, by spreading our interests across different jurisdictions and geological models, whilst keeping the focus on those Rare Earth Elements which are most in demand around the world,” said Christian Taylor-Wilkinson, Interim Chief Executive of Altona.
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