Origen Resources has signed a letter of intent (LoI) to acquire a rare earth elements (REEs) project in north-eastern Brazil covering more than 33,000 hectares (ha) in Piauí State.
The property, which includes claims in both Bahia and Piauí states, expands Origen’s exploration presence in the area.
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Soil sampling completed by the vendor, Incorporadora e Mineração Santa Rosa, identified an anomalous REE area of around 4km × 6km.
Of 33 samples collected at intervals of approximately 1.5km, seven showed elevated values, with a peak of 282 parts per million (ppm) total rare earth oxide plus yttrium (TREO+Y).
Origen has secured a 150-day exclusivity period for due diligence.
Santa Rosa and a Brazilian consultant will assist with fieldwork, while Coast Mountain Geological of Vancouver, Canada, will oversee the process.
The company aims to target ion absorption clay-hosted REE deposits, a mineralisation style found elsewhere in Brazil, such as Serra Verde in Goiás and Caldeira in Minas Gerais.
Upon due diligence and entering into a definitive agreement, Origen may acquire a 70% stake in the project by paying the vendor $100,000 (C$136,826) and issuing two million shares.
The company will also make another payment of $100,000 and issue four million additional shares on the agreement’s second anniversary.
Origen will also be required to spend $1.5m on exploration within two years of finalising due diligence.
After this period, Origen and Santa Rosa will operate the project as a 70/30 joint venture, with Santa Rosa retaining a 2% royalty.
Origen holds the option to buy back 1% of the royalty for $1.5m prior to production.
Origen CEO and director Gary Schellenberg said: “With this acquisition, Origen will be one of the largest claim holders in this emerging rare earth belt, controlling over 68,000ha.
“Early-stage, impactful acquisitions have been key to our success in the past, and being among the first to identify the significance of this belt has allowed our team to acquire this district-scale land package.
“Due diligence work on this project will commence in the coming weeks to further define the prospectivity of this new claim package.”
In April 2024, Origen Resources agreed to divest its 100% stake in the Arlington project in British Columbia, Canada, to compatriot Nickelex Resources.
