Altona Rare Earths to acquire first asset in rare earth elements mining sector

Mining firm Altona Rare Earths has entered into an exclusive agreement to acquire its first asset in the rare earth elements mining sector.

Altona said on Friday that it had struck an agreement with Ussokoti Investimentos to acquire up to 70% ownership of the Monte Muambe Rare Earths Project in Mozambique, via a farm-in arrangement.

The AIM-listed group stated the project will be run through a special purpose vehicle controlled by the company, to which the licence will be transferred.

Altona added that the farm-in commitments were spread over three phases, with the company set to increase its interest in the SPV subject to the fulfillment of work and expenditures commitments, as well as payments by the firm in cash and Altona ordinary shares.

The company will bear 100% of the project costs up to the completion of phase three and holds a majority position on the board of the SPV.

Chief executive Christian Taylor-Wilkinson said: "This is a major milestone for Altona and its shareholders. We have investigated a number of rare earths projects in Africa over the past 12 months and Monte Muambe is definitely a stand-out asset, with the potential to become a significant producer of rare earths for those industries around the world which are desperate for an alternative source of reliable and sustainable rare earth metals."

As of 1000 BST, Altona shares were up 9.09% at 18.0p.