Last checked at 19 Aug 2014 07:00
19 August 2014
Rare Earth Minerals Plc.
("Rare Earth Minerals", "REM" or "the Company")
REM elects to accelerate ownership of Megalit Lithium Joint Venture
Rare Earth Minerals Plc (LSE AIM: REM) announces that it has deposited US$1 million with its joint venture partner Bacanora Minerals Limited ("Bacanora") in order to increase its direct interest in the Megalit Lithium Joint Venture ("Megalit" or "JV#2") from 10% to 30%.
JV#2 includes the San Gabriel, Buenavista, and Megalit concessions which in total cover 89,235 hectares.
JV#2 surrounds the Sonora Lithium Project in Northern Mexico, and is considered highly prospective for delineating further Lithium and other Alkali metal resources.
On 27 May 2014, REM announced that it had formally exercised its option with Bacanora to increase its interest in Megalit from 10% to 30% by paying Bacanora $500,000 under the terms of its Megalit option agreement with Bacanora. On doing so, REM had six months to provide a further $1 million which will used for exploration and drilling on the JV#2 concessions over the coming 12 months.
The concessions of JV#2 covers known lithium-bearing clay zones that Bacanora identified as a result of its regional exploration activities. The clay units outcrop in 4 parallel, arcuate north westerly trending sequences that are estimated to extend for at least 40 kilometres along strike. Reconnaissance work by Bacanora has identified clay units on Megalit, San Gabriel and Buenavista. Chips samples taken across the clay units range from up to 1,350 ppm Li.
This early payment of the US$1 million to Bacanora secures REM's rights to a direct interest in 30% ahead of time.
REM has a right of first refusal (until December 2015) to negotiate terms to increase its interest in the Megalit JV from 30% to a maximum of 49.9%.
The total shares owed by REM in Bacanora remains unchanged however as a result of an exercise options in Bacanora REM now has 11.90% of the issued share capital of Bacanora. This interest, when aggregated with REM's 30% direct interest in the Fleur-El Sauz Lithium Joint Venture and the new 30% direct interest in the Megalit Joint Venture, results in a total economic interest in the Fleur-El Sauz and Megalit Joint Ventures of approximately 38.3%.
David Lenigas, the Company's Chairman commented:
"REM envisages an fruitful time ahead for the Sonora Lithium Project, highlighted by the recent press reports regarding consolidation in the Lithium production sector and potentially significant increases in demand for Lithium in the coming years, driven in particular by the automotive sector and their publicised expansion plans for electric and hybrid vehicles."
"We are confident that Sonora is a deposit of some significance and sees it as vital to immediately secure and cement the maximum percentage interest currently available under our existing agreement with Bacanora."
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For further information please contact:
Rare Earth Minerals plc +44 (0) 207 440 0647
David Lenigas
Kiran Morzaria
WH Ireland Limited (NOMAD & Joint Broker) +44 (0) 207 220 1666
James Joyce
Nick Field
Hume Capital plc (Joint Broker) +44 (0) 203 693 1470
Guy Peters
Jon Belliss
Square1 Consulting
David Bick +44 (0) 207 929 5599
Mark Longson