Red Mountain obtains majority stake in Liontown’s southern WA rare earth project
St George holds hope for the projects which lie in an area that has delivered significant lithium results for other explorers.
Red Mountain Mining (ASX: RMX) has entered into a farm-in agreement that gives it the option to acquire an 80% interest in the prospective Monjebup rare earth project in southern Western Australia.
The company has entered into a farm-in agreement with a Liontown Resources’ (ASX: LTR) wholly-owned subsidiary LBM (Aust.) to acquire the majority interest in their Monjebup rare earth project, consisting of 321 blocks covering ~910 sq km, in the up-and-coming Albany Fraser Orogen rare earths province in southern WA.
“This is an exciting opportunity for Red Mountain to transact with a globally recognised, multi-billion dollar, Australian resource company such as Liontown,” Red Mountain’s chairman, Troy Flannery, said.
“The company looks forward to commencing initial exploration work on the Monjebup grounds, which has previously delivered highly anomalous soil sampling results up to 969 parts per million total rare earth oxide (TREO).”
The Monjebup project is located approximately 80km north-east of the port city of Albany and lies predominantly over private land with efficient road access within and around the project area.
Chasing Albany Fraser Orogen riches
Liontown joined the hunt for rare earths in the Albany Fraser Orogen play when it applied for the Monjebup project tenements in 2022. It had a particular focus on the area’s ionic clay rare earth element potential.
It completed early-stage field reconnaissance and surface sampling along publicly accessible roads and it obtained highly anomalous REE results, including up to 969 parts per million total rare earths oxide (TREO).
Red Mountain is planning to follow-up Liontown’s early success with activities including grid sampling and metallurgical testwork to determine the leaching potential of the REE.
Historical work identified early potential
Historical sampling at Monjebup by Windward Resources in 2015 identified anomalous cerium, lanthanum and yttrium levels.
As that company was chasing nickel, copper and gold at that time, there was no focus on following up the rare earth sightings.
However, with rare earths being considered critical to the world’s future energy and defence demands, a number of explorers have made the Albany Fraser Orogen as their target for new rare earth element finds.
This includes EMU (ASX: EMU) at the Condingup Rare Earth Project, Metal Hawk (ASX: MHK) at Fraser South, Meeka Metals (ASX: MEK) at the Cascade project and Dundas Minerals (ASX: DUN) at Matilda South.
Transaction terms
Under the transaction, Red Mountain will earn its 80% interest by outlaying not less than $500,000 of exploration expenditure within the farm-in period of 24 months.
Red Mountain will also issue Liontown with an aggregate of 40,000,000 RMX fully paid ordinary shares within 5 business days from agreement execution.
Upon Red Mountain acquiring the Tenement Interest, the company shall grant LBM a 2% net smelter royalty on the minerals produced and sold from the Monjebup project attributable to Red Mountain’s participating interest in the project.
Red Mountain has critical minerals focus
The Monjebup rare earth project acquisition backs up Red Mountain’s recent critical minerals focus.
The company is currently honing in on lithium exploration in Nevada at its Lithic and Mustang Projects.
It also owns the Mt Mansbridge heavy rare earths project in Western Australia’s Kimberley region.
In January 2023, the company was granted tenement EL 33346 by the Northern Territory Department of Industry, Tourism and Trade.
That license, along with EL application 33345, is part of Red Mountain’s Charlotte lithium project and is located within the Litchfield Pegmatite Belt.