Lindian Resources has agreed to acquire a 100% stake in Malawi mineral exploration firm Rift Valley Resource Developments for $30m.
Rift Valley Resource owns the Kangankunde rare earths project, which is located in southern Malawi, 100km north of Blantyre and 9km from the Nacala rail corridor.
According to the agreed terms, Lindian will purchase all of the shares in Rift Valley from its current shareholders by paying $30m in four tranches.
The first tranche includes a $2.5m non-refundable deposit, followed by three payments of $27.5m scheduled within 48 months from signing the share purchase agreement.
Lindian has secured a binding commitment for a $3m raise, which will see 15 million new shares issued at 20 cents apiece.
This deal awaits Lindian shareholders’ approval, to be sought at a general meeting scheduled next month.
The Kangankunde project is said to be a ‘globally significant rare earths deposit’.
It has undergone several exploration phases, with the most comprehensive geological and process test work completed between 1987 and 1990.
This work was conducted by the French geoscience organisation Bureau de Récherches Géologiques et Minières (BRGM).
Lindian plans to undertake technical works for the Kangankunde project in the near term. These include community engagement, redeveloping access to planned drill programmes and sampling for updated metallurgical test work.
Lindian chairman Asimwe Kabunga said: “The potential of the Kangankunde Rare Earths Project is indeed significant and it has been highly sought after by many parties over a number of decades.
“If shareholder approval is obtained, we intend to hit the ground running and activate multiple project development initiatives to unlock Kangankunde’s value as quickly as possible. As this is already a granted mining concession, the scope of works can be much broader and the development timeline shorter.
“This binding transaction gives Lindian control of one of the world’s premier undeveloped rare earths deposits, at a time when global demand is universally forecast to accelerate materially in the years ahead.”