The Sarfartoq carbonatite complex hosts the Nukittooq niobium/tantalum project and Hudson’s ST1 rare earth element (REE) project.
Neo said in a statement: “The REEs on the Property have a high ratio of neodymium and praseodymium at 25%-40% of Total Rare Earth Oxides.”
According to the agreed terms, Neo will buy the project by initially paying $250,000 in cash to Hudson.
Neo will also pay another $3.25m upon deal closing.
Located close to tidewater and a major port facility, the Sarfartoq project hosts a mineral deposit that is rich in neodymium and praseodymium – two essential elements for rare earth permanent magnets used in electric vehicles among others.
Neo plans to explore and develop the Sarfartoq Project through a special purpose entity (SPE).
This forms part of the firm’s efforts to further diversify its rare earth ore sourcing while expanding the rare earth supply chains to feed its rare earth separation facility in Estonia.
Neo considers the Sarfartoq Project as a key element of its ‘Magnets-to-Mine’ vertical integration strategy.
Hudson president Jim Cambon said: “As the world faces critical shortages of rare earth elements outside of China, we are pleased to help bring the Sarfartoq project a step closer to commercial reality.”
The transaction awaits clearances by the TSX-V and the Greenlandic Government.
Neo president and CEO Constantine Karayannopoulos said: “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.”