Vital Raises $45M to Complete Transition to REO Operations

VML has raised A$45 million via a targeted placement, with private equity firm Lionhead Resources Fund LP becoming a cornerstone investor following its A$30 million investment. Vital completed the placement at an issue price of A$0.04 per share via a share placement to institutional, sophisticated and professional investors with 1,125 million new fully-paid ordinary shares to be issued.

Vital received strong support for the Placement. The Placement was led by Joint Lead Managers Petra Capital and MST Financial. Financial advisers were Tectonic Advisory Partners and Transocean Securities Pty Ltd. Tectonic is a New York based critical metals focused boutique investment banking group. Tectonic securities transactions are executed through Ecoban Securities Corporation. 

The Company has entered a subscription agreement with LHR which, among other things, provides LHR with the right to appoint two non-executive directors to the Vital Board. 

Proceeds from the Placement will finalise construction, commissioning and ramp-up of Vital’s Saskatoon Plant and enable it to accelerate development of projects including the Tardiff deposit at Nechalacho, as it executes a strategy to become the world’s first producer of commercial quantities of both heavy and light rare earths. It will also provide working capital requirements as Vital transitions from rare earths exploration and development into operations.  

Vital Metals’ Managing Director Geoff Atkins said: 

“Vital Metals is on the threshold of becoming North America’s only company capable of producing a refined rare earth product from its own mine, completing our transition from exploration and development to production and operations. This is an important milestone, not only in the development of Vital, but also the North American and European rare earth supply chains. 

“This placement allows us to finalise construction and commissioning and enter the operational phase of our Saskatoon plant with a robust balance sheet and working capital that can sustain our production well into the future, even amid ongoing global economic and geopolitical uncertainty. 

“We have a clear vision of the goal we want our Company to achieve – to become the world’s first producer of commercial quantities of both light and heavy rare earths. Having completed our first mining campaign at Nechalacho’s North T deposit, we now look to developing the much larger Tardiff deposit that can help us achieve this. Placement funds will allow us to accelerate mining studies and permitting works for Tardiff so that we can realise greater value from this project for our Shareholders. It’s important that we take advantage of this strategic opportunity and cement our position in global rare earths production, as Nechalacho is only the first of our project development prospects.

“We also welcome Lionhead Resources as a cornerstone investor in Vital. Lionhead brings a wealth of knowledge and experience which will benefit our company through this transition phase. The group’s decision to join Vital is a huge vote of confidence in the team and Vital’s ability to deliver on its vision. We would also like to thank Petra Capital, MST Financial and Tectonic and welcome all new investors to the register as we look forward to a successful future.”  

VITAL SECURES C$5M FUNDING FACILITY WITH PRAIRIESCAN

VML's wholly owned subsidiary, Vital Metals Canada Ltd, has signed a funding agreement with PrairiesCan (formerly Western Economic Diversification Canada) for C$5 million. The funding has been provided under Canada’s Jobs and Growth Fund.

The C$5m funding assists with working capital during ramp-up of the Company’s operations, including establishing the Saskatoon Rare Earth Extraction facility in Saskatchewan, for processing bastnaesite concentrate to produce a mixed rare earth carbonate. Activities associated with the new plant, for which funding is available, include engineering and design, equipment purchase and installation, commissioning, and optimization to finalise establishment of the new processing facilities.

The funding relates to reimbursement of 32% of eligible expenditure incurred by VMCL from 19 April 2021 to March 31, 2023 in respect of the Saskatoon Plant, with a maximum reimbursement of $3m for expenditure incurred to 31 March 2022 and C$2m for expenditure incurred to 31 March 2023. 

Vital Metals’ Managing Director Geoff Atkins said: “We are very pleased to have the support of the Canadian Government through the funding provided by PrairiesCan, especially at this very exciting time as we ramp-up our operations to production. We welcome this additional funding which will be a great addition to our working capital requirements during commissioning of Vital’s Rare Earth Extraction facility in Saskatoon. With production forecast to commence in June 2022, this will make Vital North America’s only producer of high purity rare earth carbonate with feed from its own mines providing security of supply for the global rare earths supply chain.”

VML is currently trading at 6.8 cents, up 13.33% after this announcement.

VML has successfully applied for its common shares to be trading on the OTCQB Venture Market (OTCQB), a US trading platform operated by the OTC Markets Group in New York. The trading of the Company’s Shares on the OTCQB will commence Friday, 11 March 2022 (US time).

OTC is the largest Alternative Trading System in the US, with over 11,000 securities quoted on that market. Cross-trading to the OTCQB offers the Company the opportunity to build visibility, expand liquidity and diversify its shareholder base in North America on an established public market.

VML's primary listing remains on the Australian Securities Exchange (ASX). Streamlined market standards enable the Company to utilise its ASX reporting, with no additional compliance requirements, and make its information available in the US. The Company has confirmed that admission to the OTCQB is non-dilutive because no additional capital is required to be raised and no new Shares will be issued in conjunction with inclusion on the OTCQB. 

Vital will sell to REEtec rare earth carbonate product containing a minimum of 750t Neodymium/Praseodymium (NdPr), contained within 2,000t/year total rare earth oxides (TREO) with a maximum of 25% Cerium. This represents a total of 75% of Vital’s expanded operation at its Saskatoon rare earths extraction plant. It will be interesting to see where the remaining 25% capacity ends up.

REETEC INCREASES OFFTAKE OF VITAL’S REO BY 50%

HIGHLIGHTS

• Vital’s offtake agreement with REEtec amended to increase volume by 50%
• Off-take agreement to supply 750t/yr NdPr over 5 years
• Increase equates to 75% of Vital’s expanded Saskatoon rare earth extraction plant capacity
• REEtec is using Vital’s product as its principal feedstock
• Amended agreement extends Vital’s product sales to REEtec to 2028 with option for an additional expanded 10-year agreement
• Vital’s Saskatoon plant is under construction with commissioning to commence end of year and commercial production expected mid-2022

Vital Metals’ Managing Director Geoff Atkins said:

“This 50% increase in product to be sold to REEtec represents a vote of confidence in Vital Metals’ ability to guarantee feedstock to the European rare earths supply chain.

“This increase will result in the expansion of our Saskatoon plant to double capacity by the end of 2023 with REEtec taking 75% of the plant capacity from that time. There’s also potential for a longterm supply agreement for an additional 10 years after 2028, which would give us a guaranteed market for our products as we look to extend Nechalacho’s mine life in Stage 2 operations and bring our other projects on-line.”

Vital has announced this morning that it expects to ship approximately 1,000t of beneficiated product to Saskatoon in the 3rd Quarter, 2021. This will be sufficient to supply the first 9 months commissioning with further deliveries to be scheduled as required.

Vital Metals’ Managing Director Geoff Atkins said mining and sorting operations at Nechalacho have continued through August with key highlights being zones of high grade ore able to be bagged directly from the crusher, without the need to be processed through the ore sorter.

“As mentioned last month, mining at North T intersected high-grade REO mineralisation in the northern edge of the pit wall which was not part of our existing North T mineral resource. Mining in this area produced a high-grade ore that did not require processing through the ore sorter – we have simply crushed and bagged it, ready for transport to Saskatoon in coming weeks,” he said.

“In addition to bagging high-grade ore, processing of medium and low-grade material through the ore sorter has continued through August. The ore sorter has continued to produce beneficiated product with production rates increasing according to plan. We expect to commence shipping approximately 1,000t of beneficiated product by the end of September. We will ship these to Saskatoon, where our rare earth extraction plant is currently under construction. The volume of material being transported to Saskatoon will be sufficient to commission and operate the Rare Earth Extraction Plant prior to further deliveries of product next northern summer.”

Vital has lifted out of their trading halt on the announcement that they are acquiring Quebec Precious Metals Corporation’s 68% interest in Kipawa and 100% of Zeus heavy rare earth projects in Quebec, Canada, for C$8 million staged over 5 year.

A key takeaway from the announcement: “In addition, Kipawa is the only rare earth project in the world in which Toyota directly invested, with an initial stake of 49% which was converted to a 10% NPI in 2014.” Having Toyota directly involved is huge.

The market likes this announcement, VML is trading at 0.068 (up 11.48%) at the time of this post and it did top 7 cents earlier this morning.

Vital intersects high-grade REO in Tardiff Zones 2 & 3 including outside existing resource at Nechalacho

Highlights

• Vital completed 10 holes across Tardiff Zones 2 and 3 to define a Stage 2 Mine Plan for Nechalacho rare earths project in Canada, with all holes hitting extensive mineralisation
• Drilling at Tardiff Zones 2 and 3 intersected thick zones with total rare earth oxides grades above 2% TREO
• Best results from Zone 2 from the 5 drill holes include:
  ? 25.1m at 3.03% TREO
  ? 19.0m at 2.05% TREO
• All Zone 2 intersections are within 75m of surface with the best results in the western most drill holes, indicating high-grade TREO is open to the west
• Zone 2 high-grade TREO intercepts are outside the Upper Zone Mineral Resource, indicating potential for an additional high-grade TREO resource in the Tardiff area
• The remaining 5 holes drilled at Zone 3 also hit shallow, high grade REO intersections
• Best results from Zone 3 include:
  ? 51.0m at 2.13% TREO
  ? 36.7m at 1.96% TREO
• All 5 holes drilled in Zone 3 confirmed the high grades previously encountered with highgrade mineralisation open in all directions 
• With high grade mineralisation remaining open at all zones, Vital will undertake additional drilling at Tardiff to delineate the boundaries of the three Tardiff high-grade zones in addition to identifying the relationships between the zones, including whether they are in fact connected.
• Previously announced metallurigcal results from Tardiff indicate that this bastnaesite mineralision can be processed through the same plant being constructed to process North T ore.