21st Mar 2014 07:58
LONDON (Alliance News) - Rare Earth Minerals PLC Friday said it has elected to exercise its option to move to a 10% interest in the San Gabriel, Buena Vista and Megalit Concessions in northern Mexico.
The rare metals and minerals projects investment company said that it has formally advised its joint-venture partner Bacanora Minerals Ltd that it has elected to exercise its option to go to a 10% interest in the sites, which surround the Sonora Lithium Project.
Earlier in March Rare Earth Minerals signed a joint-venture agreement with Bacanora giving it the option to get 10% interest in the blocks.
Under the terms of the agreement, Rare Earth has the option to acquire an initial 10% interest in the San Gabriel, Buenavista and Megalit concessions by paying Bacanora an upfront cash consideration of GBP250,000 and spending GBP500,000 on exploration and drilling on the certain concessions over a six-month period.
On Friday, REM said it has paid Bacanora a total of GBP500,000 and has elected to pay the remaining GBP250,000 early, updating the market aas the process moves forward.
"The company sees it as vitally important to rapidly cement its overall interest in the Sonora Lithium Project prior to the expected publishing the key metallurgical recovery studies and the potential upgrade to the previously public disclosed lithium resource of the Project as a whole," Chairman David Lenigas said in a statement.
REM also has the option to increase its interest to 30% by virtue of an additional cash consideration of GBP500,000 and committing to a further GBP1 million in expenditures for exploration and drilling on the same concessions over one year.
The company said earlier in the month that a new 3,000 metre drilling programme will now commence on the concessions in the coming weeks, which is partly designed to upgrade the lithium resources from the inferred resource category to the indicated resource category and increase the resource, and also to test new lithium targets along strike.
REM said its concessions held under joint ventures in the Mexican Sonora Lithium Project have now formally increased to 100,140 hectares with the signing of the Megalit joint venture.
"REM is satisfied that an accelerated drilling programme on the extensions to the already delineated resource is justified, as the joint venture continues to test for the new limits of the lithium mineralisation. The early exercise of the option will assist with this," Lenigas added.
By Tom McIvor; [email protected]; @TomMcIvor1
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