Lodestar Minerals Secures US Critical Minerals Portfolio with Acquisition of Virgin Mountain HRE Project

Lodestar Minerals (ASX: LSR) is set to acquire the highly prospective Virgin Mountain heavy rare earth project in Arizona when it executes a deal to buy out project owner Arizona Mountain Passage Heavy Rare Earths (AMP).

AMP has a binding option agreement to acquire the project’s 23 mostly contiguous federal lode claims in a well-serviced region with advanced infrastructure from Globex Mining Enterprises subsidiary Globex Nevada.

The strategic transaction represents a significant step for Lodestar in securing and developing a portfolio of critical mineral projects in the US.

Cash and Scrip Consideration

Lodestar will pay AMP $450,000 cash upfront, plus 100 million ordinary shares at $0.025 each and 50 million options exercisable at $0.045 with a four-year expiry.

Lodestar will assume the option agreement and, upon exercising, pay Globex Nevada $820,000 cash plus $656,000 worth of shares in four instalments.

Globex Nevada will be entitled to a 3% gross metal royalty and, after the first seven years, will receive approximately $152,000 per annum until the start of commercial production.

The known mineralisation at Virgin Mountain, which covers 1.92 square kilometres of an area 120km north-east of Las Vegas, contains all 12 elements on China’s current export restriction list, including dysprosium, terbium, lutetium, and highly prized neodymium-praseodymium (Nd/Pr).

Channel Sampling Results

Globex captured a limited number of rare earth occurrences in channel sampling at Virgin Mountain in 2022 to validate historical reports.

Best assays included 1.26% total rare earth oxides (TREO) containing 36% heavy rare earth oxides (HREO) and 20% Nd/Pr, and 0.72% TREO, containing 30% HREO and 22% Nd/Pr.

Lodestar’s geologists expect to validate this data and capture mineralisation outside the known Hummingbird prospect as part of the company’s own due diligence process.

It will also perform mineralogical and metallurgical test work to ensure the ability to economically liberate rare earths, as well as pursue end-user discussions to establish a downstream pathway.

Capital Raising Underway

Lodestar has received firm commitments for a $3.25 million capital raising through the placement of 130 million ordinary shares at $0.025 each to sophisticated investors including Tribeca Investment Partners and S3 Consortium (Next Investors/Stocks Digital).

Investors will also receive one option for every two shares issued, with an exercise price of $0.045 each and a four-year expiry.

Tribeca said it was keen to participate in the raising, as Virgin Mountain’s geographic location and heavy rare earths history give the project “significant potential” in light of China’s increased clampdown on rare earth exports.

New Board Appointment

Lodestar has also announced that senior leadership team member Coraline Blaud will join the board as executive director.

Ms Blaud has more than 10 years’ experience in the resources sector and a track record in exploration management, strategic development, and corporate governance.

She previously worked at Kingwest Resources, where she made significant contributions to moving the company’s projects from first-pass exploration to scoping study level.

Ms Blaud’s technical expertise and leadership experience add significant value to Lodestar’s strategic and operational direction as it advances activities across its assets in the US, Chile, and Western Australia.