Neo Performance Materials has made a binding agreement with Hudson Resources to acquire an exploration license covering Hudson’s rare earth property in Greenland. The investment represents a key step in Neo’s mines-to-magnet vertical integration strategy and its plans to expand into rare earth permanent magnet manufacturing in Estonia.
The pact covers Hudson’s Sarfartoq Carbonatite Complex in southwest Greenland which hosts a mineral deposit that is enriched in neodymium and praseodymium, two essential elements for rare earth permanent magnets. Located just 60 kilometers from the international airport in Kangerlussuaq, the project is close to tidewater and a major port facility and is directly adjacent to ample hydroelectric potential in Greenland.
“Neo continuously pursues supply chain optionality in order to ensure that our customers have a dependable supply of engineered rare earth products,” commented Constantine Karayannopoulos, Neo’s President and Chief Executive Officer. “Once in production, this project will significantly increase the diversity of global rare earth supply for our processing facilities around the world. It also is another step in our magnets-to-mine vertical integration strategy. Based on our significant experience in assessing strategic mineral resources around the world, we believe the Sarfartoq resource in Greenland is a strategic asset that uniquely complements Neo’s European rare earth magnet growth strategy.”
Headquartered in Vancouver, British Columbia, Hudson is a Canadian mining and exploration company focused on the operation and development of strategic and critical green mineral projects in Greenland. “We are very excited about the future of the Sarfartoq REE project and the ability to be part of the critical metal supply chain into Europe and the Americas,” said Jim Cambon, president.
Neo plans to explore and develop the project to further diversify its global sourcing of rare earth ore and to expand the rare earth supply chains that feed Neo’s rare earth separation facility in Estonia where it is also pursuing plans to break ground on a greenfield rare earth permanent magnet manufacturing plant there.
Neo intends to assign its rights under the agreement to a special-purpose entity which it would control that would hold the license and continue exploration and ultimately extraction of the rare earth elements on the project. Key terms of the agreement include for Hudson to receive a nonrefundable initial cash payment of US $250,000 upon signing plus an additional $3.25 million upon closing the transaction, plus future payments depending on the outcome of the project.
The rare earth elements on the property have a high ratio of neodymium and praseodymium at 25%-40% of total rare earth oxides in one zone and, 3 km east, another zone registering at 45%. Neo and the SPE expect to conduct additional exploratory drilling and other work to move the project forward to eventual commercial operation. Neo also intends to enter into an offtake agreement with the SPE with rights to purchase 60% of the ore or mineral concentrate produced. For more info, see www.neomaterials.com.