Best known for its Sweden-based Norra Karr heavy rare earths project, Tasman Metals (TSXV:TSM,NYSEMKT:TAS) took a step in a different direction on Wednesday. The company has entered into a letter of agreement with Kipu Metals to acquire a portfolio of stratiform chromite projects in Northeastern Finland.
The transaction is subject to the approval of the TSX Venture Exchange, but looks to be fairly straightforward given that Michael Hudson, a director at Tasman, and Mark Saxon, a director at Tasman as well as its president and CEO, are both also Kipu directors and shareholders. Indeed, Tasman will pay Kipu just C$45,529 for the package, a sum that represents the amount of money Kipu has spent to date on the projects.
As for the package itself, it sounds promising. The two projects it includes — Akanvaara and Koitelainen — are about 75 kilometers apart from each other, and according to Tasman, they’ve had “very extensive previous drilling, metallurgical testing and historical resources.” Furthermore, they’re both “easily accessible by road” and lie along the same trend as the Kemi chromite mine, which is already producing.
More broadly, Tasman is encouraged by the fact that chromite is defined as a critical material by the European Commission (so are platinum-group elements, which the projects also demonstrate potential for). On a similar note, the company states that Europe accounts for a significant amount of the world’s chromium metal demand, consuming 1.8 million tonnes a year. Currently 80 percent of that amount comes from South Africa, but Tasman believes it stands a chance at gaining a foothold in the market. “It’s good to have some diversification,” said Jim Powell, vice president, corporate development, at Tasman.
Tasman’s acquisition also points to diversification in another sense — as those watching the chromite space well know, junior miners are most often discussed in the context of Ontario’s Ring of Fire, where development is currently stalled. For those interested in the metal, it will no doubt be refreshing to watch Tasman’s progress.
In terms of what’s next for the new chromite projects, Powell said that Tasman will be looking to “assess what we have and what we want to do next.” He added, “there’s pretty extensive drilling, [and] we’d probably want to … see what it would take to take that into a 43-101 category.” The company also needs to decide which project to focus on first.
At close of day Wednesday, shares of Tasman were selling for $0.43 each on the TSX Venture, up 7.5 percent. On the NYSEMKT they were up sitting at $0.374, up 1.27 percent.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.