Globe picks up rare earth project

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GLOBE Metals & Mining has entered into a joint venture agreement with Australian company Resource Star to acquire up to 80% of the Machinga rare earth project in Malawi.

“The Machinga rare earth project has shown some exciting results, and in particular appears to be endowed with some of the high-value rare earths, such as dysprosium,” Globe executive chairman Mark Sumich said. “In addition, the niobium and tantalum grades are very high which, in combination with the rare earth elements, could make this a very significant project for Globe.”

As part of the JV deal, Globe will sole fund exploration up to the completion of a feasibility study and, in doing so, will earn staged equity. The company will earn an initial 20% through the contribution of $US250,000 for exploration expenditure, followed by a further $2.25 million to earn 51%. Once a JORC resource has been estimated, Globe will hold a 70% stake which will increase to 80% after funding the feasibility study. Recent rock chip samples from the project show a peak of 2.64% total rare earth oxides, including a peak of 29,900 parts per million niobium and 1673ppm tantalum.

“The Machinga mineralisation appears to have a higher heavy rare earth ratio at 25-28 per cent than all of the major operating mines and deposits worldwide,” Sumich said. “Machinga also has a very high ratio of the high-value element dysprosium at 2.5-2.75 total rare earth oxide, while most deposits worldwide have dysprosium oxide ratios between 0.1 and 0.5 per cent.”

Resource Star recently lodged an application with the Malawian Department of Mines and Minerals to extend Machinga’s lease to the south and east to cover strike continuation.

The additional area would add some 450 square kilometres to the currently granted 485sq.km. The registered title of the project will be transferred to Globe after expenditure of $2.5 million and will require approval from the Minister of Natural Resources, Energy and Environment in Malawi. The agreement provides the companies with the option to secure a joint venture exploration agreement over Globe’s promising sandstone-hosted redox uranium Livingstonia project in Malawi. Just last month Globe entered another JV to earn up to 90% of the Mount Muambe fluorite project in Tete Province, Mozambique.

Shares in Globe have gained A2c to 24.5c today.