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Four months after closing the acquisition of Canada’s Noront Resources and its Eagle’s Nest project in Ontario’s Ring of Fire, one of the world’s largest undeveloped high-grade nickel sulphide deposits, privately held Wyloo Metals is investing A$150 million ($103m) in Hastings Technology Metals (ASX: HAS), a rare earths developer in Australia.
Hastings Technology, which hopes to become the world’s next producer of neodymium and praseodymium concentrate used in permanent magnets, will use Wyloo’s funds to acquire a 22.1% stake in Neo Performance Materials (TSX: NE), a global rare earth processing and advanced permanent magnets producer, from an affiliate of Oaktree Capital Management LP.
Toronto-based Neo produces magnetic powders and magnets, specialty chemicals, metals and alloys that are key in technologies ranging from hybrid and electric vehicles to pollution control systems to energy-efficient lighting and water purification.
“This transaction with Hastings spans the value chain, from mining to magnet manufacturing,” Wyloo CEO Luca Giacovazzi said in a press release. “As the owner of the only commercial rare earth metals facility in Europe, Neo is strategically placed to help Europe meet its goal to become climate-neutral by 2050.”
Hasting’s flagship rare earths project —Yangibana — spans 650 sq. km in Western Australia’s Gascoyne region, roughly 250 km northeast of Carnarvon. The project has a JORC-compliant measured resource of 3.9 million tonnes grading 1.19% total rare earth oxides (TREO); indicated resources of 8.6 million tonnes of 1.25% TREO; and inferred resources of 8.4 million tonnes at 1.09% TREO, including 0.4% neodymium oxide (Nd2O3) and praseodymium (Pr6O11).
According to Hastings, Yangibana will be a conventional open pit mine and the ore will be crushed, milled and processed at a beneficiation plant on site into a rare earth concentrate, which will then be transported 450 km to a proposed hydrometallurgical plant in the Pilbara region for processing into a mixed rare earth carbonate product and shipped overseas.
In a project update in October 2021, Hastings said it is focused on bringing the project into production in 2024.
Wyloo’s investment in Hastings gives it the right to appoint a director to its board and keep the director in place as long as its equity interest is 12.5% or higher.
The three-year notes can be exchanged after 60 days into Hastings ordinary shares at a price of C$5.50 per share. The notes will earn an annual coupon equivalent to the three-month bank swap rate plus 9%, payable in kind through the issue of additional notes.
Wyloo’s investment in Hastings follows a commitment it announced in March to spend C$4.9 million on exploration at Orford Mining’s (TSXV: ORM) nickel-copper-platinum group metals West Raglan property in Nunavik, Quebec.
Under an option and joint-venture agreement in January 2021, Wyloo has the right to earn up to 80% of Orford’s 100%-owned West Raglan project for a total expenditure of C$25 million over seven years. The 707-sq.-km West Raglan project lies in the same west-central portion of the Cape Smith Belt that hosts Glencore’s (LSE: GLEN) Raglan mine and Canadian Royalties’ Nunavik nickel mine.
In February, Wyloo entered into an agreement with IGO Ltd. (ASX: IGO) to jointly evaluate opportunities for downstream nickel processing in Australia. Wyloo has investments in Mincor Resources, a nickel sulphide developer and explorer with assets in Kambalda and Widgiemooltha in Western Australia, and in Queen’s Road Capital Metals & Mining in Canada. Queen’s Road is a financier to the global resource sector.
