Minbos to divest its interest in its Madagascar Rare Earths Project

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Minbos executes agreement to divest Madagascar rare earths project. (Credit: Alex Banner from Pixabay)

Minbos Resources Limited (ASX:MNB) (Minbos or the Company) is pleased to announce that it has entered into a binding Agreement with ALS (Hong Kong) Limited (‘ALS’) to divest its interest in its Madagascar Rare Earths Project.

The Company holds an interest in the Madagascar Rare Earths Project through an Option Agreement with Tana Minerals Pty Ltd (‘Tana’). Under the agreement, Minbos has the exclusive right to acquire 90% of the shares in Tana’s subsidiary, MRE Mining (Mauritius) Limited, which included commitments for exploration expenditure1.

The Company has signed an Exclusivity Option for a period of 9 months (‘Option Period’) from the Commencement Date (being 7th March 2022) through which ALS can complete due diligence on MRE Mining (Mauritius) Limited, the project tenements and other associated business and operational information.

At any time during the Option Period, ALS can exercise its option to acquire all the issued share capital in MRE Mining (Mauritius) Limited, which will trigger a payment to Minbos. In addition, prior to exercise of the option and in order to maintain exclusivity, ALS is required to pay a monthly exclusive dealing fee.

The Board of Minbos has formally approved divestment of the Madagascar Rare Earths Project.

Agreement Details

The consideration payable to Minbos as set out in the Exclusivity Option is as follows:

  • ALS to make cash payments to the Company of A$10,000 per month to maintain exclusivity over the course of 8 months from 7 April 2022 – 7 November 2022, being a total of $80,000 in cash payments. This will give ALS a period of 9 months of exclusivity (the ‘Option Period’).
  • Late payment of any monthly exclusivity fees by ALS will allow the Company the right to terminate the Agreement.
  • As consideration for termination of the Company’s rights under the Option

Agreement with Tana and on the assumption ALS exercises its right to acquire MRE Mining (Mauritius) Limited before expiry of the Option Period, ALS will pay to the Company A$2,400,000.

Source: Company Press Release