Lynas Rare Earths (ASX:LYC) has announced it’s acquiring Brazilian rare earths player Meteoric Resources (ASX:MEI) – pushing the latter up over +50% heading into afternoon trades to land on 25.8cps.
That move alone now puts MEI’s 1Y returns up to nearly +80%; the news has also seen a liquidity surge pour onto Meteoric’s books. As of 12pm AEST, some 103.3M shares in Meteoric have traded hands versus a 4wavg of 6M.
Lynas is picking up 100% of Meteoric’s shares for close to A$1B in large part because the acquisition “complements Lynas’ existing operations in [WA] and Malaysia.” That payment explains in part why Lynas shares were down over -5% on the news, compared to Meteoric’s +50%.
That Meteoric has the largest ionic clay JORC rare earth oxide MRE outside of China is an obvious draw for Lynas, despite the notorious difficulties with clay-based REE.
Still, given that Lynas is Australia’s only real meaningful rare earths player – tapping into the critical minerals supply chain strategy still on the government’s agenda – if anybody has the resources to make it work, it’s probably Lynas.
Lynas also pointed to cheaper downstream processing costs in Brazil; the company intends to analyse whether it can integrate its new Brazilian operations with those currently active in Malaysia. The acquisition of MEI also allows Lynas to report its overall ore reserve has increased by 26%.
“Brazil is a well-established and supportive mining jurisdiction and its rare earth reserves are the largest outside China,” Lynas’ Rare Earths Board Chair Prof. John Humphrey said.
“We have enjoyed getting to know Andrew and his team and congratulate Meteoric on their achievements to date, including extensive knowledge of the ore body and ionic clays.
“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.”
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