Mineral exploration company Defense Metals has finalised the purchase of Canadian firm Spectrum Mining, which owns the Wicheeda Rare Earth Element (REE) property.

The deal was concluded after Defense Metals issued shares, as well as paid cash and exploration expenditure needed to exercise the option to buy all of Spectrum’s issued and outstanding common shares.

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This adhered with the option agreement signed in November 2018.

Defense Metals issued 78,115,549 of its common shares to Spectrum, at $0.225 apiece and paid $100,000 in cash, bringing the final consideration to $17,675,999. 

Furthermore, the exploration firm issued 1,171,733 common shares to Mulgravian Ventures Corporation (MVC) according to the finder’s fee agreement signed in relation to the option agreement.

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Defense Metals CEO Craig Taylor said: “Since entering the option to acquire the exploration stage Wicheeda REE Project in late 2018 Defense Metals has advanced the project through metallurgical flowsheet development, and initial and updated mineral resource estimates.

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“This work has culminated in our recent positive PEA for Wicheeda yielding a pre-tax net present value (NPV@8%) of C$760 million. Defense Metals now owns and controls 100% of the Wicheeda REE Project. With this acquisition and our PEA, we look forward to continuing to advance this exceptional North American REE asset.”              

Defense Metals is required to pay 2% net smelter returns royalty to Spectrum Mining upon the start of commercial production from the Wicheeda property, which comprises six mining claims in the Cariboo Mining Division, British Columbia.

Located around 80km north-east of Prince George, the 2,008ha Wicheeda REE Property is planned to be mined as a conventional open-pit operation.

Earlier, Defense Metals revealed that the project would require $461m in initial capital expenditure.