Rafaella Resources has agreed to acquire Borralha and Vila Verde tungsten projects in Portugal from PanEx Resources.

The deal would see Rafaella taking over Pan Iberia from PanEx Resources.

Pan Iberia’s wholly owned unit PanMetals Unipessoal has contractual rights to acquire 100% of the Borralha project, and a 90% stake in the Vila Verde projects from Minerália – Minas, Geotecnia e Construcoes (Minerália).

According to the binding heads of agreement (HoA), Rafaella would acquire Pan Iberia from PanEx Resources for a total consideration of $4.49m (€4m).

The consideration is based on a JORC mineral resource of at least 25,000t of tungsten at Borralha with a 0.14% minimum grade.

However, pro-rata adjustments will be made to the consideration if the resource estimate is less than the target. This adjustment payable will be a minimum of €2m.

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Rafaella is expected to pay the consideration in cash and shares. The first €1m will be paid in cash and the balance in Rafaella shares.

Expected to be signed at the end of January 2022, the final agreement will be subject to the completion of due diligence and third-party approvals.

Rafaella expects the acquisition to complement its Santa Comba project while significantly strengthening its strategic position in the Iberian Peninsula.

The Vila Verde and Borralha projects are located 250km and 210km respectively from Rafaella’s Santa Comba tungsten and tin project in north-west Spain.

Rafaella Resources managing director Steven Turner said: “This is an important acquisition for the company as we position ourselves to become a leading Western European supplier of tungsten, a critical metal facing significant supply chain risks due to the dominance of supply from China.

“The Borralha and Vila Verde deposits are widely considered the most attractive undeveloped tungsten projects in Portugal.

“With Santa Comba advancing through the feasibility study and with the open pit permit application to be submitted in 2022, the addition of these Portuguese projects provides Rafaella with a portfolio of resources in various stages of the development cycle.”

In October, the Portuguese General Directorate of Energy and Geology (DGEG) awarded an exploitation licence to the Borralha project. The licence has a 25-year term with two 15-year extensions.

The Vila Verde project is due to receive a mining licence from DGEG.