Canada Rare Earth Arranges Long Term Supply of Rare Earth Concentrate from Brazilian Joint Venture Project
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sep 22, 2014) - Canada Rare Earth Corp. ("Canada Rare Earth" or the "Company") ( TSX VENTURE:LL) is pleased to announce that it has entered into a long term rights agreement to purchase all of the rare earth concentrate to be produced from a property, known as the Mata Azul property, situated in Tocantins, Brazil. The mineral rights are owned by Mineracao Mata Azul S.A. ("Mata Azul"). The Mata Azul property is of significant interest to Canada Rare Earth as discussed in the news release dated February, 2014. In particular the property has been the subject of several exploration programs including sampling, regional mapping, drilling wells, trenching, auger drilling, chemical and petrographic analyzes, mineralogy and beneficiation tests.
Canada Rare Earth and Mata Azul are continuing to work collaboratively to establish a funded rare earth business which will focus on advancing exploration, mining and concentrating various minerals on the Mata Azul property. The two parties are in the process of negotiating a Definitive Joint Venture Agreement to extend and supersede the joint venture letter of intent announced in February, 2014.
Pursuant to the long term supply/sales agreement Canada Rare Earth has the rights but not the obligation to purchase all of the rare earth concentrate produced from the Mata Azul property for a base price plus a percentage of the difference between the base price and fair market value. The duration of the arrangement is for 20 years plus automatic extensions under certain situations.
The arrangement benefits the Mata Azul mining and concentrating project and enhances the ability to finance the project by providing an off-take customer. In turn, Canada Rare Earth will have secured an excellent source of rare earth concentrate for any future refinery projects CREC becomes involved in including a separation refinery proposed to be built on the Mata Azul site. Additionally, Canada Rare Earth may arrange for follow on buyers to purchase any volumes not required for Canada Rare Earth's own purposes. As per the Company's news release of February 2014 the Company is planning, pursuant to its joint venture with Mata Azul, to design and build a 6,000 metric ton per annum refinery.
The long term supply/sales arrangement is subject to the commencement of Mata Azul's mining and concentrating operations which, in turn, is subject to a number of factors including financing, regulatory approvals and viable operations.
Tracy A. Moore, CEO and President of Canada Rare Earth commented: "We are very pleased to have entered into the long term supply arrangement with Mata Azul. The Mata Azul property has excellent potential to host significant quantities of critical rare earth elements contained within workable mineralogy (monazite and xenotime). The property has the potential to support a large separation refinery business in Brazil and complements our global business strategy of establishing multiple refineries in various globally significant locations. The Company is currently in advanced negotiations with several potential investors to finance up to a 10,000 metric ton refinery in Brazil. Whether negotiations are successful with those particular potential investors the Company believes that having secured a potential long term supply of rare earths will result in end users or other conventional commercial lenders being willing to provide project financing. If financing is obtained and a concentration facility is completed the Mata Azul project will represent a rich source of rare earth concentrate well suited to our proposed refineries, in volumes that enable planning for large scale operations producing a full spectrum of rare earth oxides on a long term basis and at an advantageous price."
Canada Rare Earth cautions investors that the proposed Mata Azul project is in the conceptual stage and there is no assurance that results of exploration of the property and associated metallurgy will be sufficiently successful to warrant development or that rare earth concentrate will be produced to the standards and volumes that would be required to make the project commercially viable.
CEC Rare Earth Corp. was instrumental in facilitating this purchase agreement and, as a result, 712,500 options have become fully vested leaving a further 2,137,500 options available for vesting with the delivery of future long term contracts.
ABOUT CANADA RARE EARTH CORP.
Canada Rare Earth Corp. is developing a vertically integrated business within the global rare earth industry by focusing on establishing rare earth separation refineries. This initiative is undertaken in conjunction with CEC Rare Earth Corporation, which has access to personnel experienced with designing, building and operating rare earth separation refineries. Additionally, the Company has several exploration properties exhibiting multi element potential including rare earths. Information concerning the Company is contained in documents filed by the Company with securities regulators, available under the Company's profile at www.sedar.com. For more information, please visit the Canada Rare Earth Corp. web site at www.canadarareearth.com.
ON BEHALF OF THE BOARD OF DIRECTORS OF Canada Rare Earth Corp.:
Tracy A. Moore, CEO & President
"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release." The information contained herein contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: risks related to failure to obtain adequate financing on a timely basis and on acceptable terms; risks related to the outcome of legal proceedings; political and regulatory risks associated with mining, exploration and operations; risks related to the maintenance of stock exchange listings; risks related to environmental regulation and liability; the potential for delays in exploration or development activities or the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; results of prefeasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; risks related to the price fluctuation of rare earths and other commodities; and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company's disclosure record. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Investors are cautioned against attributing undue certainty to forward-looking statements. These forward looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from the Company's expectations or projections
For more information on the Company, Investors should review the Company's filings that are available at www.sedar.com.