Havilah Transfers Uranium Assets to Heavy Rare Earths, Limited

Highlights

• Havilah Resources transfers uranium exploration assets to Heavy Rare Earths Limited for shares, options, and exploration commitments.
• Deal includes Radium Hill, Billeroo, Lake Namba, and Prospect Hill projects in South Australia’s Curnamona province.
• Transaction allows Havilah to monetize uranium assets while retaining potential upside through shareholding and free-carried project interest.

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Australia-based Havilah Resources (HAV.AX (opens in a new tab)) inked a deal with Heavy Rare Earths Limited (HRE (opens in a new tab)), transferring part of its uranium exploration assets in the Curnamona province (opens in a new tab) of eastern South Australia. Inclusive of this deal involves Radium Hill, Billeroo, Lake Namba and Prospect Hill projects, with HRE securing exploration and mining rights for uranium, rare earth elements and scandium.  Thedeal helps to monetize a portion of Havilah’s remaining uraniumassets, providing Havilah with potentially significant uranium market exposure and uranium project development upside.

The company issued a press release (opens in a new tab) on its website describing the deal.

The Transaction

The transaction includes Havilah receiving 38 million HRE shares, with half in a six-month escrow and the rest in one year escrow.

Havilah will also receive 17.5 million unlisted HRE options, exercisable at $0.06 within three years.

For their part of the deal, HRE commits to spending A$3m ($2m) over three years on exploration, with at least A$1m in the first year.

Based on fulfilling the deal’s conditions, HRE may earn 80% interest in the uranium exploration and mining rights and an 80% joint venture (JV) interest in any new discovery tenements.

Havilah will be free carried for a 20% JV interestuntil a bankable feasibility study is completed.

Subsequently, Havilah may contribute or dilute to a 1.5% net smelter return royalty on uranium produced.

Is the deal completed?

Not yet. The deal is subject to the completion of due diligence by HRE, as well as shareholder approval for the share and option issues, plus all necessary housekeeping (e.g., the various regulatory government and shareholder approvals.

According to Dr. Chris Giles, technical director for Havilah:

“The agreements with HRE are a way for Havilah to monetize a portion of its remaining uranium assets, for which it is currently receiving neither inherent market recognition nor any value.

“The substantial shareholding in HRE provides Havilah with significant market exposure, while the free-carried project interest gives Havilah uraniumproject upside in the event of a successful uraniumdevelopment.

“Havilah retains 100% ownership of its exploration licenses and all other mineral rights (excluding rare earth elements and scandium on Radium Hill extensions), which HRE’s substantial exploration expenditure and field work programs will help maintain in good standing.”

Havilah Resources

Founded in 1996 and publicly traded as HAV-AX, Havilah Resources (opens in a new tab) is an Australian exploration and mining company focused on discovering and developing mineral resources in South Australia. Established in 1996, the company is known for its extensive portfolio of copper, gold, cobalt, and iron ore projects in the region, particularly in the rich mineral districts of the Curnamona Craton and the Flinders Ranges.

The company's operations are centered in South Australia, a region known forits rich deposits of base and precious metals.

With a current market capitalization of $72.94 million, 42.91% of the company stock is held by insiders.

Heavy Rare Earth Limited

Heavy Rare Earth Limited (HRE) Heavy Rare Earths Limited (ASX:HRE (opens in a new tab)) is an Australian rare earth exploration and development company. Rare earth materials are used in manufacturing rare earth permanent magnets which are essential in a wide array of technology and future facing applications, including smart phones, wind energy, and hybrid and electric vehicles.

HRE’s key exploration project is Cowalinya (opens in a new tab), near Esperance in Western Australia. This is a clay-hosted rare earth project with a JORC Inferred Resource of 159 Mt @ 870 ppm TREO and a desirable rare earth composition where 28% are the valuable magnet rare earths and 23% the strategic heavy rare earths.

 The companyhas a pipeline of grassroots rare earth exploration projects in Australia at Duke (opens in a new tab), near Tennant Creek in the Northern Territory, and Merino (opens in a new tab), near Geraldton in Western Australia.