Soaring prices of rare earth minerals rally investors to scale up prospecting
Photo/Laban Walloga
Residents of Mrima celebrate after they announced their total support for the mining of niobium in the area by Canadian firm Cortec on March 30. Kaya elders also gave their blessings.
Canada-based minerals and metals firm Pacific Wildcat Resources is raising $25 million (Sh2.1 billion) through a private placement to fund the acquisition of a stake in its Kenyan rare earth and niobium project.
The company said it had signed a letter of engagement with GMP Securities L.P to raise the amount.
The offering will be undertaken by a syndicate of agents led by GMP Securities L.P with Byron Capital Markets Ltd and GMP acting as co-book runners.
The company said it will offer subscription receipts at an issue price of $ 0.30 (Sh24.90) per unit subject to approval by its shareholders and the TSX Venture Exchange in Canada where it is listed.
“This financing will give the company the funds to complete the acquisition of a 70 per cent indirect interest in the Mrima Hill property and to allow sufficient working capital for an important resource drilling campaign,” Pacific Wildcat President Darren Townsend said in a statement.
The company currently has a conditional contract is in place providing it with the right to acquire an indirect 70 per cent interest in the Mrima Hill niobium and rare earth project in Kwale near Mombasa.
The Mrima Hill site is an ex-Anglo American and Pechiney property, which was the subject of extensive historical work.
Pacific Wildcat said in February it had found larger niobium and rare earth reserves on the Mrima Hill site than earlier projected.
Niobium is mixed with steel to create a strong alloy used in the construction of pipes for water and sewage systems and components used in various types of vehicles.
The company said in March it will begin drilling this year at a new site that has shown potential for rare earth deposits.
Pacific Wildcat said tests had established the presence of high grade deposits of rare earth on Kiruku Hill, just three kilometres from its current Mrima Hill niobium and rare earth project site.
Rare earths are vital in manufacturing high-tech electronics products such as highly specialised miniature nuclear batteries, laser repeaters, superconductors and miniature magnets.
An acute global shortage of rare earth minerals has triggered a spike in exploration and prices.
China, which accounts for an estimated 97 per cent of global rare earth supplies, has been tightening trade in the strategic metals, sparking a jump in prices.
Japan, which accounts for a third of global demand, has been stung badly, and is looking to diversify its supply sources, particularly of heavy rare earths such as dysprosium used in magnets.
The United States, Europe and Japan last month joined forces to challenge China’s restrictions on exports of rare earth minerals critical to the manufacture of advanced technology.
Besides the Kenyan projects, Pacific Wildcat holds the largest tantalum licence ground position in Mozambique where it has several mining leases covering over 450 square kilometres located on parts of the Alto Ligonha pegmatite belt recognised as one of the premier mineralised pegmatite fields in the world.
Tantalum is mainly is used within the electronics industry, mainly as powder and wire for capacitors.
Capacitors made from tantalum are favoured in space-sensitive, high-end applications in telecommunications, data storage and medical implants.
Tantalum is also used in a range of other applications requiring high corrosive resistance and high temperature strength including surgical implants, cemented carbides and tantalum compounds for optical applications and sonic acoustic wave filters.
