REM elects to accelerate ownership of Mexican Lithium Joint Venture
March 21, 2014 (Source: Rare Earth Minerals PLC) — Rare Earth Minerals Plc (LSE AIM: REM)) announces that it has today formally advised its joint venture partner Bacanora Minerals Limited (“Bacanora”) that the Company has, with immediate effect, elected to exercise its option to go to an immediate 10% direct registered interest in the San Gabriel, Buena Vista and the large 94,814 hectare Megalit Concessions (“Megalit Joint Venture”) which surround the Sonora Lithium Project in northern Mexico, as announced on the 13 March 2014.
David Lenigas, the Company’s Chairman commented:
“The Company sees it as vitally important to rapidly cement its overall interest in the Sonora Lithium Project prior to the expected publishing the key metallurgical recovery studies and the potential upgrade to the previously public disclosed lithium resource of the Project as a whole. REM is satisfied that an accelerated drilling programme on the extensions to the already delineated resource is justified, as the joint venture continues to test for the new limits of the lithium mineralisation. The early exercise of the option will assist with this.”
Under the terms of the Megalit Joint Venture, REM had the option to acquire an initial 10% interest in the San Gabriel, Buena Vista and Megalit concessions by paying Bacanora an upfront cash consideration of $250,000 and spending $500,000 on exploration and drilling on the Megalit Joint Venture over a 6 month period. To date, REM has paid Bacanora a total of $500,000 and has elected to pay the remaining $250,000 early. REM will advise the market when the 10% interest has been registered with the Mexican authorities.
REM has a further option to increase its interest in the Megalit Joint Venture to 30% by paying of an additional cash consideration of $500,000 to Bacanora and committing to a further $1,000,000 in expenditures for exploration and drilling on the same concessions over 1 year. REM has the right to advance these payments and acquire the 30% on an accelerated basis. REM will then have an exclusive first right of refusal (exercisable until December 2015) to negotiate terms to increase from a 30% interest to a maximum of 49.9% in the Megalit Joint Venture.
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