After shareholders gave the green light, Sagon Resources (ASX: SG1) has now cemented its 100% ownership of the Cummins Range rare earth element project in WA’s Kimberley.
According to Sagon, Cummins Range is one of only two known rare earth baring carbonatite deposits in Australia.
Rare earth producer Lynas Corporation (ASX: LYC) holds the other carbonatite-style rare earth deposit in the country.
Sagon pointed out that Cummins Range also has potential for high neodymium and praseodymium enrichment, which are critical rare earth elements used in manufacturing electrical vehicles, wind turbines and military hardware.
As part of the acquisition, Sagon completed a $1.17 million capital raising to institutional and sophisticated investors.
Additionally, to cement its ownership, Sagon will pay the vendors $500,000 in cash and issue a further $500,000-worth of shares.
Sagon will use part of the capital raising funds to make its $500,000 cash payment, with the remainder to be used to undertake a maiden exploration program at the newly acquired project.
Advancing Cummins Range
Sagon is planning the maiden program, which is due to begin in the coming months once requisite permits have been secured.
Additionally, Sagon is reviewing the historical resource and geological data to develop a JORC 2012-compliant mineral resource estimate for the project.
Rare earth element market
REE have been deemed critical due to most of the world’s supply arising out of China and the crucial need for the material in emerging technologies.
Earlier this month, US President Donald Trump met with Australian Prime Minister Scott Morrison to sign off on a plan regarding US securing a stable REE supply from Australia.
With Cummins Range one Australia’s small number of advanced REE projects, Sagon hopes to capitalise on this agreement.
Today’s news spurred Sagon’s share price up more than 46% to trade at $0.066 by mid-afternoon.