Cadoux Ltd (ASX:CCM, OTCQB:FYIRF) has strengthened its position in the burgeoning critical minerals industry by acquiring a 50% stake in emerging rare earth elements (REE) producer, Minhub Operations Pty Ltd (MOPL) under an agreed two-stage Share Purchase Agreement (SPA).
MOPL is a private company with an emerging rare earths beneficiation and production strategy via development of the Minhub mineral sands processing facility in Darwin.
Cadoux’s purchase is consistent with the terms of a binding Heads of Agreement (HOA) entered into with MOPL 12 months ago regarding the joint development of the Minhub facility.
Emerging market potential
The proposed future production at Minhub also aligns with Australia’s critical minerals sovereign supply chain objectives.
Managing director Roland Hill said: “Cadoux has a clear critical minerals development objective. Whilst HPA is our core focus, we see a unique opportunity and definite market advantage to Minhub’s development and long-term production strategy of heavy rare earths.
“We have been working closely with MOPL since May last year and are encouraged about project progress and the emerging market potential of the various rare earth streams produced. We will continue to work with MOPL to complete the outcomes defined under our HOA.
“The Minhub project is innovative in concept and a very exciting project to be involved with considering the potential commercial benefit that the project offers.”
Collaboration
Cadoux’s first stage purchase of 50% of the issued shares in MOPL follows due diligence reviews and the completion of several key conditions precedent to the acquisition.
The company will issue 4 million shares in consideration of the stage one acquisition.
Under the HOA and SPA, Cadoux is collaborating with MOPL to meet the project milestones for stage two of the acquisition, which will take its interest in MOPL to 100%.
About MOPL
MOPL is developing the Minhub third-party downstream heavy mineral sands and rare earths production facility in collaboration with Arafura Rare Earth Limited, which has the right to own up to 50% via pro-rata funding with Cadoux.
Minhub is designed to work with emerging mineral sands producers to process xenotime and monazite concentrates for select markets and supply ARU with rare earths feedstocks which will be upgraded to a suite of premium products.