Megado Gold (ASX:MEG) to Acquire Rare Earths Project in Idaho – The Market Herald
- Megado Gold (MEG) to Acquire the North Fork Rare Earths Project in the United States through a Combination of Stocks and Options with Felix Strategic Minerals
- North Fork in the US state of Idaho is known to host REE mineralization enriched in critical rare earths
- Megado Gold says the project is a “tremendous opportunity,” particularly given the U.S. government’s focus on rare earths for its clean energy transition and national security mission
- The transaction is expected to close by the end of May and MEG expects to raise $2.4 million through a placement to fund initial exploration work.
- Shares of the company are up 81.8% and trading at 20 cents
Shares of Megado Gold (MEG) soared today after the miner announced it had reached a definitive agreement to acquire Felix Strategic Minerals, whose wholly-owned subsidiary owns the high-grade rare earths project of North Fork.
The North Fork project consists of up to 499 claims that cover a total of 4,171 hectares in the Idaho cobalt belt in the United States.
It is home to seven historic prospects, including the Silver King, Cardinal, Jackpot, Radiant, Monazite Queen, and Upper and Lower Lee Buck prospects.
North Fork is known to contain several high carbonatite rare earth element (REE) mineralized veins over 10 kilometers strike.
The REE mineralization observed on the project is enriched in critical rare earths (CREE) which generally include neodymium, praseodymium, dysprosium, terbium and yttrium.
Previous exploration for the project reportedly returned “exceptional” grades such as two meters at 10.3% rare earth oxides (TREO) including 1.2% CREE and 1.52 meters at 17.7% TREO .
Megado Gold Managing Director and CEO Michael Gumbley said the North Fork project is a “tremendous opportunity” for the company and an “incredible addition” to its portfolio.
“The U.S. government has designated rare earth elements as strategically critical and has thus made domestic production an integral part of its clean energy transition and national security,” said Mr. Gumbley.
“We are delighted that Megado will benefit from the accommodating political climate, the welcoming jurisdiction of Idaho, a strong existing U.S. investor base and obvious drill-ready targets to begin exploration upon completion of the deal. acquisition of North Fork.”
Megado Gold will pay Felix Strategic Minerals 32 million MEG shares and five million options exercisable at 15 cents through December 31, 2024. The company will also reimburse up to $700,000 of incurred expenses.
The transaction is conditional on Megado receiving shareholder and regulatory approvals which are expected to be obtained by the end of May.
Additionally, MEG plans to raise $2.4 million through a placement to fund initial exploration activities. The placement will include the issuance of 30 million shares at 8 cents each. The placement is subject to shareholder approval.
Shares of the company rose 81.8% on the news to trade at 20 cents at 11:52 a.m. AEST.