American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) will take a new path to accelerate the development of its Halleck Creek Project in Wyoming, USA — one of the largest rare earth deposits in North America — creating a dedicated subsidiary for the project.
An extensive strategic review led to a decision by the company’s board to make operational and structural changes to best position the Halleck Creek Project as a strategic resource to US markets.
The company says the changes will make Halleck Creek more accessible to major US investors, helping to facilitate the project’s development and enhance value to existing shareholders.
As part of these changes, the project will be developed under 100% ARR-owned, Wyoming Rare (USA) Inc. (WRI) with its own dedicated capital structure and funding sources, positioning it as an attractive prospect for US-based investment and partnerships.
The subsidiary will focus on development of the Cowboy State Mine on a portion of the Halleck Creek Wyoming state tenements.
Positioned to “unlock significant value”
The recent energy fund grant from the State of Wyoming and its pathway to permitting sees WRI well positioned to accelerate development of the Halleck Creek resource.
Given that less than 75% of the mineralised zones at the project are yet to be drilled and that the deposit remains open at depth, the project presents significant upside potential.
A scoping study, released in March, identified the fundamental commercial viability of this approach, with a net present value (NPV) of US$673.9 million, an internal rate of return (IRR) of 22.5% and a payback period of 2.9 years, with total initial capex of US$456.1 million.
ARR chairman Richard Hudson said, “This new focus represents a pivotal moment for ARR. By creating a dedicated subsidiary for the Halleck Creek Project, we are positioning the company to unlock significant value and accelerate the development of a critical resource for the US.
"These changes will not only streamline our operations but enable us to better increase shareholder value long term.”
Hudson added, “The Halleck Creek Project is key to the State of Wyoming, and we are committed to delivering value for our shareholders through dedicated development and strategic partnerships.
"The changes we have determined will allow the full value of Halleck Creek to be realised as a strategic project for North America, while ensuring ARR continues its highly successful exploration activities in pursuit of our vision to be a leading player in the critical minerals sector.”