Altona Rare Earths to acquire Rare Earths Project in Uganda

Altona Rare Earths (ANR) FOLLOW is to acquire a Rare Earths Project in Uganda after the group signed an option deed to acquire a 70% legal and beneficial interest in Leadway Group. 

The mining exploration firm, which also published its half-year results the six months ended 31 December 2020 this morning, said it will acquire the 70% interest in Leadway Group, a Ugandan registered company which owns the Nankoma Rare Earths Project in Uganda.

The Project is held under Exploration Licence EL00115 and covers an area of 67.5 km2 and is located c.50 km east of Jinja, which lies 130 km east of Kampala in Eastern Uganda.

Altona has initiated a three-month period of legal and financial due diligence on Leadway ahead of exercising its first Option Right, to acquire an initial 51% interest by 30 June 2021.

The initial period will also see the Company perform a small-scale scout exploration programme, including core analysis of the samples in respect of the Nankoma Project.

In consideration for the grant of the Option Rights, Altona said it is required to pay a fee of £25,000 as well as issue 250,000 Ordinary Shares to Leadway Group’s shareholders. 

The rationale for the acquisition of Nankoma is based on the close proximity of the tenement to ASX-listed Ionic Rare Earth's rare earths exploration project which lies from the north-west to the east of the Nankoma tenement and has a similar geology and geomorphology.

Ionic Rare Earth, which is known as IonicRE, has reported, from its Makuutu Project, an estimated total resource of 315 million tonnes at 650 ppm Total Rare Earth Oxide ("TREO"). 

It also reported high levels of Critical Rare Earth Oxides ("CREO"), at 310 ppm, which include the elements, Neodymium and Praseodymium, two of the rare earth elements which Altona is focused on extracting, due to their demand in many green and high tech industries, it noted.

Altona said the TREO and CREO figures are ‘highly encouraging’, due to the ease of recovery and low-cost nature of this type of deposit. It highlighted to investors that these figures have provided the Board of Altona with “sufficient confidence” to invest in the Nankoma tenement.

Separately, Altona outlined in its half-year results that it had made “a positive start” with its investment strategy into rare earths mining. With the group having already secured one acquisition in this space, it said it is now looking to finalise two more in the next quarter.

Altona stated that the period was significant for both the group and its shareholders, as it was the start of its new mining investment strategy into Rare Earth Elements projects in Africa.

Altona said it hopes to position itself as part of this valuable supply chain in future by fulfilling its strategy to acquire majority interests in a number of African rare earth mining projects.

To date, the company has signed several agreements to acquire interests in a range of rare earth projects including the Chambe Rare Earths Project in Southern Malawi, the Nankoma Rare Earth Project in Uganda, and the Monte Muambe Rare Earths Project in Mozambique. 

Altona noted that its increased activity in its pursuit of its rare earths strategy is reflected in a financial loss during the six months ended 31 December 2020 at £0.119m (1H19: £78,000).

At the date of this report, the Group said its cash reserves place it in ‘a strong financial position’ to meet the immediate funding requirements of the contracts that it has recently signed in order to progress its strategy of acquiring new rare earth mining projects in Africa.

As a result of the three mining assets that the company is working towards acquiring, Altona believes it will be ‘excellently positioned to take advantage of the rising need for new sources of rare earths elements’, which is considered one of the fastest growing mining industries.

In reference to the sector, the group said its "technology metals" are among the most in-demand elements; a statistic which it believes is only likely to grow as the world moves towards being more environmentally conscious and starts to fulfil its green potential. 

ANR price chart

Altona Rare Earths is an Aquis-listed mining exploration company which is focused on the evaluation, rapid development and extraction of Rare Earth Element (REE) metals in Africa. 

During the year to 31 June 2020, Altona closed a significant 15-year chapter on its Australian coal exploration activities and opened the door onto its new Rare Earth Metals mining strategy, which it believes “has far greater relevance for the world in the 21st Century.” 

The past two years has seen a major global shift in the mind-set of rare earth metals end-users, these being primarily the manufacturers of, inter alia, high-strength permanent magnets for the electric vehicle market, military hardware and green power sectors. 

Presently, China controls between 90-95% of the supply chain and crucially, also controls the refining and processing sectors, creating a worldwide bottleneck. It also controls more than 70% of EV battery manufacturing, which means a rise in cost of vehicles due to inflated REE prices could cause a significant delay to one of the world's major "Green Solutions". 

Global governments are becoming increasingly aware that to increase the numbers of cars on the road, vehicles must be priced suitably. Since there are no viable alternatives to provide the huge quantities of the technology metals, REE mining firms are turning to Africa. 

In theory, the company stated that rare earths mining companies in Africa could develop and start supplying Technology Metals to the world's green industries in under three years. 

The Company believes it is now poised at the juncture of a significant opportunity within the rare earth metals sector which the group hopes to capitalise during this year and beyond.  

For more news and updates on Altona Rare Earths: FOLLOW