Pearl Gull Iron Ltd (ASX:PLG) has entered an agreement which provides it with the opportunity to farm-in to a rare earth element (REE) project in Chile whose geology is said to be comparable to a Chinese region rich in ionic rare earth mineralisation.
As part of the agreement, Pearl Gull Iron will acquire Huemul Holdings Pty Ltd, which itself is negotiating for the possibility to earn up to an 80 percent interest in Chilean company NeoRe SpA, which holds tenements comprising the La Marigen project which are prospective for ionic absorption clay (IAC) REEs.
The project covers around 22,800 hectares across five tenement application areas on the Chilean coast, an emerging province for these types of rare earth projects, which has been compared in geology and weathering to a mineralised territory in China which spreads from the southwestern Yunnan to Zhejiang in the southeast.
Additionally, the proximity of Aclara Resources Inc’s Penco project suggests this territory to be rich in clay-hosted REE elements such as neodymium and praseodymium, as well as dysprosium and terbium.
Chairman Russell Clark said the acquisition would enable Pearl Gull Iron to invest in a territory with high potential for this type of mineralisation.
“The farm-in to the La Marigen Project provides the Company with an opportunity to potentially acquire an interest in an emerging ionic adsorption clay rare earth elements region, known to host high grades,” he said.
“Importantly the project area is located in close proximity to Concepción, which is a major industrial city on the coast of Chile, and the limited surface sampling programme within the project area returned results commensurate with reported occurrences of IAC REE deposits in the region.
“Additionally, our partners at NeoRe conducted (un-certified) bulk sample testing (200kg sample) at the University of Concepción, which returned preliminary results suggesting that the project areas are reasonably likely to host disorbable IAC REE.”
The market has responded positively to the news, with shares sitting at 2.4 cents at 11:49 AEST, a rise of 26.32 percent since the market opened.