27th May 2014 08:47
LONDON (Alliance News) - Rare Earth Minerals PLC said Tuesday it has exercised its option with Bacanora Minerals Limited to increase its interest in the Mexican Megalit Lithium joint venture from 10% to 30% over a maximum period of one year.
The Megalit joint venture includes the San Gabriel, Buenavista concessions and the 94,814 hectare Megalit concession that surround the Sonora Lithium Project in northern Mexico.
Under the terms of the option agreement with Bacanora, announced on March 13, 2014, Rare Earth Minerals has paid Bacanora cash consideration of USD500,000 and has committed to spend a further USD1 million on exploration and drilling on the Megalit venture over the next year.
REM's interest in the Megalit Joint Venture will increase to 30% when the USD1 million has been provided to the joint venture over the next year or sooner, said the firm.
Rare Earth also has a right of first refusal until December 2015 to negotiate terms to further increase its interest in the Megalit JV from 30% to a maximum of 49.9%.
The company currently has a 10.18% shareholding in Bacanora, its joint venture partner in both the Megalit and Fleur-El Sauz Lithium Projects in Northern Mexico. When aggregated with REM's 30% direct interest in the Fleur-El Sauz Lithium Joint Venture and the existing 10% direct interest in the Megalit Joint Venture, this results in a total economic interest in Fleur-El Sauz of approximately 37.13% and a total economic interest in Megalit of approximately 19.16%, said Rare Earth.
Shares in Rare Earth Minerals were trading 7.41% higher at 0.623 pence per share Tuesday morning, one of the biggest gainers on AIM.
By Alice Attwood; [email protected]; @AliceAtAlliance
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