RareX will pay $50,000 within two days for the option and has 90 days to exercise the option allowing it to purchase Cummins Range for up to $3 million in cash and shares.
The additional cash will provide valuable working capital for Element 25 as it completes the pre-feasibility work at its 100% owned Butcherbird High Purity Manganese Project in Western Australia.
This transaction represents another important incremental step in the company’s stated strategy to rationalise its project portfolio to allow the technical team to focus on the development of the high purity manganese business at Butcherbird.
The Cummins Range project covers 48.5 square kilometres and is prospective for carbonatite rare earths deposits.
RareX may exercise the option within 90 days to acquire 100% of the Cummins Range Project by either paying $500,000 cash and issuing $500,000 of shares, or, by paying $1 million in cash.
Within 12 months of exercise, RareX must pay an additional $500,000 cash and issue $500,000 of shares, or, pay $1 million in cash.
Finally, within 36 months and subject to the completion of a bankable feasibility study (BFS), RareX must pay an additional $1 million in cash, shares, or combination of.