- Shares in Frontier Resources (FNT) were up as much as 25 per cent after the company signed an agreement to acquire all shares in Southern Rare Earths
- Consideration for the acquisition is more than 57.6 million shares priced at 1.3 cents and two separate classes of performance shares
- Southern Rare Earths owns the Murraydium Project which is considered prospective for ionic clay hosted rare earth elements
- Frontier has also received firm commitments to undertake a $1.3 million capital raising and will use the funds for exploration at Murraydium
- Shares in Frontier are still up a healthy 21.9 per cent and trading at 2 cents at 12:06 am AEST
Shares in Frontier Resources (FNT) were up as much as 25 per cent after the company signed an agreement to acquire all the shares in Southern Rare Earths.
Total consideration for the acquisition is 57,692,307 fully paid ordinary shares priced at 1.3 cents and two separate classes of 13,461,538 performance shares.
Furthermore, Frontier will reimburse Project Risk, a shareholder of Southern Rare Earths, $35,000 in expenses incurred to apply for and maintain the tenement applications.
Southern Rare Earths holds four exploration licence applications in the Murray Basin in South Australia which are considered prospective for ionic clay hosted rare earth elements (REE).
These tenements make up the Murraydium Project which covers an area of 8732 square kilometres.
Once the acquisition has been completed, Frontier will review geological models and historical exploration data, as well as undertaking field mapping, surface sampling and systematic drilling.
Chairman Alec Pismiris said the acquisition of Southern Rare Earths represented an exciting exploration opportunity in a region that is highly prospective for ionic clay hosted rare earth deposits.
“Previous work done in the area has outlined an extensive mineralised system where shallow near surface exploration has the potential to delineate shallow JORC resources,” Mr Pismiris said.
Capital raising
Frontier has also received firm commitments to undertake a $1.3 million capital raising.
Shares will be issued to professional and sophisticated investors at 1.3 cents.
Subject to shareholder approval, Frontier Directors will subscribe for 4.57 million shares at the same price as the capital raising to raise $59,410.
Frontier will use the money to undertake exploration and development work on its Tolukuma Gold Project in Papua New Guinea and the newly granted Murraydium Project.
The company also announced it plans to undertake a one for eight non-renounceable rights issue.
Shares in Frontier were still up a healthy 21.9 per cent and trading at 2 cents at 12:06 am AEST.