Lynas Rare Earths to Buy Meteoric in US$678 Million Deal

Australian miner Lynas Rare Earths (ASX:LYC,OTCQX:LYSDY) is set to acquire Meteoric Resources (ASX:MEI,OTCPL:METOF) in an all-share, US$678 million transaction to consolidate control over the largest known ionic clay rare earth deposit outside of China.

The acquisition secures Meteoric’s flagship Caldeira rare earth project in the Brazilian state of Minas Gerais, diversifying Lynas’ resource base and adding an ionic clay deposit to complement its existing high-grade Mount Weld hard rock operation in Western Australia.

“Lynas is very pleased with the potential to bring together the Caldeira deposit which is the largest known ionic clay rare earth Mineral Resource outside China reported in accordance with the JORC Code, and Lynas’ high grade Mt Weld deposit and leading rare earth operations,” Lynas Chairman John Humphrey said in a statement.

Under the binding Scheme Implementation Deed, Lynas will acquire 100 percent of Meteoric shares, exchanging 0.0207 Lynas shares for each Meteoric share.

A recently completed definitive feasibility study for Caldeira outlines average annual production of approximately 3,862 tons of neodymium-praseodymium (NdPr) oxides and 127 tons of dysprosium-terbium (DyTb) oxides over the mine's life.

Across its measured, indicated, and inferred mineral resources, the Caldeira deposit contains an estimated 802,000 tons of NdPr and 41,000 tons of DyTb.

Lynas indicated the transaction will increase its reported measured and indicated total rare earth oxide mineral resources by approximately 79 percent, and its ore reserves by roughly 26 percent, on a pro forma basis.

The company noted potential synergies integrating Caldeira output into its existing downstream operations in Malaysia, while also evaluating the development of downstream processing facilities within Brazil.

“I am very proud that the work of our team has attracted a partner of Lynas Rare Earths' calibre to Caldeira," Meteoric Executive Chair Andrew Tunks said. "That discipline is why Caldeira stands where it does today: an orebody that is high grade, highly recoverable, low in capital intensity, low in operating cost, and highly scalable."

Australian billionaire Gina Rinehart, whose Hancock Prospecting is Lynas' largest shareholder with a 7.6 percent stake, has actively backed ex-China critical mineral developers across her portfolio.

The acquisition builds upon Lynas' broader momentum this year. In March, the company extended its long-term supply agreement with Japan Australia Rare Earths to 2038 and secured a 10-year operating license renewal for its Malaysian processing facility.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.