Shanghai-listed Shenghe Resources Holding Ltd. will acquire a 12.5% stake in Greenland Minerals & Energy Ltd. and also agreed to help the ASX-listed company advance the Kvanefjeld rare earth elements project in Greenland.
"Together we aim to integrate Kvanefjeld's rare earth output with existing and new downstream rare earth processing capacity, to generate an extremely cost-competitive and highly scalable rare earth business," John Mair, managing director of Greenland Minerals, said in a Sept. 23 news release.
The company entered a subscription agreement with Shenghe Resources and its 99.99%-owned subsidiary Le Shan Shenghe Rare Earth Co. Ltd., whereby Shenghe will invest A$4.6 million in Greenland Minerals and acquire 125 million shares at 3.7 cents apiece.
The agreement is subject to Greenland Minerals securing approvals from shareholders and the Foreign Investment Review Board by Nov. 30.
Upon the agreement becoming unconditional, Shenghe will have the right to appoint a nonexecutive director to Greenland Minerals' board and anti-dilution rights to maintain its 12.5% stake.
Greenland Minerals also noted that it is working to secure off-take agreements for byproducts from the Kvanefjeld property.