Oct 5 2015
Canada Rare Earth Corp. ("Canada Rare Earth" or the "Company") is pleased to announce the completion of the acquisition of assets complementary to its strategic plan of creating a vertically integrated rare earth supply chain.
The assets were purchased from CEC Rare Earth Corp. ("REC"), an affiliated private British Columbia company (the "Acquired Assets") and on the terms set out in the news release dated September 2, 2015. As part of the acquisition of the Acquired Assets (the "Acquisition"), REC will no longer be directly involved in the rare earth industry.
The Acquired Assets will enhance the Company's ability to develop and commercialize rare earth properties with the ultimate goal of processing and refining rare earths derived from its properties and from other sources.
With the closing of the Acquisition, Canada Rare Earth now has the following ongoing initiatives:
- a rare earth property portfolio including properties in Canada;
- dealings with prospective providers of heavy mineral sands, tailings, ionic clay deposits, traders and the Mata Azul project;
- direct access to multiple rare earth pre-treatment and separation refineries in China and prospective refineries in Southeast Asia (three), the Middle East (one), and Mata Azul in Brazil;
- direct access to a rare earth metal manufacturing business in Southeast Asia and a prospective metal making business also in Southeast Asia;
- direct access to a rare earth alloying manufacturer in Southeast Asia;
- opportunities to provide rare earth concentrates to existing rare earth refineries and to prospective refineries; and
- connections to 25 major international manufacturing companies and their supply networks which require rare earth oxides, metals and alloys.
The Acquired Assets included $195,000 of cash and $60,000 of inventory plus certain receivables, work in progress, and business arrangements that relate to exploring for, mining, concentrating, sourcing, treating, separating and selling rare earths in all forms and at all stages, and rights to earn equity positions in various initiatives.
Commenting on combining the Acquired Assets with the Company's properties and vertical integration strategy Tracy A. Moore, CEO explained, "We have been working closely with REC for three years on Company initiatives and separately REC has worked with other clients and partners. The addition of the REC assets to the Company synergistically unifies, expands and simplifies our business while aligning the interests of stakeholders."
Mr. Moore continued, "The Acquisition also provides Canada Rare Earth with an important cornerstone for our business model, immediate access to and direct connection with one of the most experienced designers, builders and operators of rare earth separation refineries in China and therefore the world."
Canada Rare Earth's strategy for over two years has been the simultaneous development of sourcing rare earths; developing separation capabilities; approaching prospective customers for the separated, individual rare earths; and approaching financiers. The significant accomplishment of combining Canada Rare Earth with a capable designer, builder and operator and with several of its prospective separation refineries is an important cornerstone to our business strategy and implementation.
Consideration for the Acquired Assets was set out in the September 2, 2015 news release and is summarized as follows:
- 24,178,000 common shares, subject to an 18 month escrow provision;
- three royalties based on non-refundable gross collected proceeds derived from the Acquired Assets;
- continuing the exercise period for 5,000,000 options exercisable at $0.10 per share until November 8, 2017;
Additionally, the Company agreed to indemnify REC for up to $40,000 of Canadian corporate income taxes resulting from this transaction
ON BEHALF OF THE BOARD OF DIRECTORS OF CANADA RARE EARTH CORP:
Tracy A. Moore, CEO & President
Source: http://www.canadarareearth.com/