10 October 2022
Canada’s first rare earths producer Vital Metals Limited (ASX: VML l OTCQB: VTMXF) (“VML”,“Vital”, “Vital Metals” or “the Company”) has advised Quebec Precious Metals Corporation (“QPM”) that it will not proceed with the acquisition of QPM’s 68% interest in the Kipawa exploration project and 100% interest in the Zeus exploration project in Quebec, Canada (the “Projects”).
Vital’s new management has not been satisfied with the results of its due diligence on the Projects, in particular the ability to progress its understanding of the Kipawa (Kebaowek) First Nation’s stated objection to the Projects and to determine whether support from the First Nation can ever be obtained for Vital’s exploration and development of the Projects. The Company is also not satisfied with the technical due diligence completed by former management, which aimed to utilise alternate development and processing methodologies. Vital has informed QPM of its decision to terminate the agreement after not being able to agree on terms to extend the due diligence period to enable Vital to further reduce risk.
It has become evident to Vital that, given the excellent potential of the assets it currently holds, proceeding with the acquisition would divert fundsfrom its current high priority Nechalacho Project construction, also noting that development of the Kipawa and Zeus Projects would not occur for several years.
Vital remains focused on its Saskatoon rare earths production facility and development of the Tardiff deposit at Nechalacho in NWT, Canada, which will consume all resources in the short to medium term.
In addition, the Company has the opportunity to develop the previously reported xenotime mineralisation at Nechalacho’s North T pit near the base of the current mining envelope.
Development of this mineralisation would allow Vital to achieve its vision of producing commercial quantities of both light and heavy rare earths.
Vital Metals Interim CEO Russell Bradford stated, “We see significantly more value for our shareholders in aggressively advancing Stages 1 and 2 of our Nechalacho Project and in our existing Project pipeline, rather than being distracted on less rewarding opportunities”.