Lodestar Raises $3.25M to Acquire High-Grade US Rare Earth Project
Lodestar Minerals has agreed to acquire a major heavy rare earth element project in Arizona, positioning itself near the US's only active rare earth mine amid tightening Chinese export controls. The $3.25 million placement backs immediate exploration plans.
- Acquisition of Arizona Mountain Passage Heavy Rare Earths Pty Ltd with option on Virgin Mountain project
- Project rich in critical heavy rare earth elements like Dysprosium, Terbium, and Lutetium
- Located near Mountain Pass Mine, the sole US rare earth producer with significant government and corporate support
- $3.25 million placement led by Tribeca Investment Partners and others
- Exploration to commence immediately including geological mapping, sampling, and metallurgical testing
Strategic Acquisition in a Critical Sector
Lodestar Minerals Limited has taken a decisive step into the US rare earths market by agreeing to acquire Arizona Mountain Passage Heavy Rare Earths Pty Ltd (AMP), which holds a binding option to acquire the Virgin Mountain Heavy Rare Earth Project in Arizona. This move aligns Lodestar with the growing global demand for heavy rare earth elements (HREEs), essential for defence, clean energy, and high-tech manufacturing.
The Virgin Mountain project is notable for its high concentrations of valuable HREEs such as Dysprosium, Terbium, and Lutetium, alongside Neodymium and Praseodymium. These elements are critical components in permanent magnets, semiconductors, and advanced defence technologies. The project’s location near the Mountain Pass Mine, the only active rare earth producer in the US, offers strategic proximity to established infrastructure and processing capabilities.
Geopolitical Context and Market Implications
China’s recent expansion of export restrictions on twelve rare earth elements, including those found at Virgin Mountain, has intensified supply chain concerns globally. This geopolitical backdrop elevates the importance of domestic sources like Virgin Mountain. The US government’s substantial funding to Mountain Pass Mine, including a $550 million Department of Defense investment and a $500 million partnership with Apple to develop rare earth magnets, underscores the strategic priority of securing local supply chains.
Lodestar’s acquisition is supported by a $3.25 million placement led by Tribeca Investment Partners, S3 Consortium, and John Hancock’s Family Office, providing the company with the capital to immediately advance exploration activities. These include geological mapping, surface sampling, geophysical surveys, and metallurgical test work aimed at validating the mineralisation and assessing economic viability.
Exploration and Development Outlook
The Virgin Mountain project has a rich exploration history dating back to the 1950s, with uranium explorers and the US Geological Survey identifying radiometric anomalies linked to rare earth mineralisation. Recent due diligence sampling by Globex Mining Enterprises has confirmed significant total rare earth oxide (TREO) grades with a substantial proportion of heavy rare earth oxides (HREO).
Lodestar plans to build on this foundation by conducting detailed outcrop mapping, mineralogical studies, and metallurgical testing to ensure the REEs can be economically extracted. The company also intends to engage with US federal agencies to pursue permitting and potential funding support, leveraging the current US policy focus on critical minerals.
Financial and Shareholder Considerations
The acquisition terms include the issuance of shares and options to AMP shareholders, cash payments, and a 3% gross metal royalty to Globex Nevada. These arrangements are subject to shareholder approval, as is the placement and associated incentive options for directors and consultants. Oakley Capital Partners is acting as lead manager for the capital raise, with fees structured around cash and equity components.
Lodestar’s Chairman Ross Taylor highlighted the strategic value of the acquisition, emphasizing the project's potential to supply heavy rare earth feedstock to Mountain Pass’s planned HREE facility. The company’s move into the US critical minerals landscape reflects a broader industry trend towards securing supply chains outside of China.
Bottom Line?
Lodestar’s acquisition and immediate exploration plans position it at the forefront of US heavy rare earth development amid shifting global supply dynamics.
Questions in the middle?
- How will Lodestar validate and expand on historical assay results to define a viable resource?
- What are the timelines and hurdles for permitting and federal funding support in the US?
- How might the proximity to Mountain Pass Mine influence potential partnerships or off-take agreements?
