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- Reach Resources (CVS) is set to acquire Skyline Resources through a binding heads of agreement with Bath Resources
- Through this deal, Reach will also own the ELA 09/2643 tenement application within WA’s Gascoyne region, which is experiencing a renewed focus for rare earth elements
- Chairman Robert Downey says this buy represents an exciting exploration opportunity in a region that is highly prospective for monazite hosted rare earth deposits
- Once the acquisition is complete, Reach will review historical data and carry out reconnaissance work and sampling prior to drilling
- Company shares are up 25 per cent to trade at one cent
Reach Resources (CVS), formerly Cervantes Corporation, is looking to acquire Skyline Resources.
Reach entered a conditional binding heads of agreement to acquire all of Skyline’s shares. By doing so, the company will also gain full ownership of the ELA 09/2643 tenement application, which is located in Western Australia’s Gascoyne province.
The tenement area, referred to as the Skyline Rare Earth Project covers 247 square kilometres and lies within a region that is experiencing a renewed focus for rare earth elements (REEs).
REEs are essential components to produce high-capacity magnets and batteries used in electric vehicles. In 2020, the global rare earths market was valued at US$2 billion (A$2.7 billion) and is expected to grow to around US$12 billion (A$16.1 billion) by 2030, according to the Department of Industry, Science, Energy and Resources.
Reach Resources Chairman Robert Downey said the deal marks an “exciting opportunity”.
“The acquisition of Skyline Resources represents an exciting exploration opportunity in a region that is highly prospective for monazite hosted rare earth deposits,” he said.
“Previous work conducted in the area has outlined an extensive mineralised system where shallow near surface exploration has the potential to delineate shallow JORC Resources, offering the company what we believe to be excellent exploration upside potential.”
Under the transaction, Reach Resources will acquire 100 per cent of the issued capital of Skyline Resources from Bath Resources for $20,000.
Reach will also need to complete due diligence work within 20 days before the acquisition is completed.
Once Reach has acquired the company, it plans to review all historical exploration data and geological models. It will also undertake field reconnaissance work and geochemical sampling before drilling, which will investigate the presence of shallow rare earth mineralisation.
Company shares were up 25 per cent to trade at one cent at 2:34 pm AEDT.
