Vital Metals, owner of the NWT’s Nechalacho rare earths property, said it plans to sell shares equivalent to more than a 40-percent stake in the firm to US investors.
In a late Sunday news release, the Australia-based company said it would sell a 19.52-percent interest in Vital to US firm Strategic Resources for about $2.69 million ($3 million in Australian dollars).
Vital will also sell roughly a 25-percent interest to other “accredited US investors” for a further $3.4 million ($3.8 million in Australian dollars), subject to shareholder approval.
The company said the money would fund drone surveys and related exploration work, as well as an updated mineral resource estimate and pre-feasibility study. Such a study is a necessary step toward opening a large-scale mine.
The agreement also involves work on new technology, which Vital termed “dry field force extraction,” that the company hopes will make Nechalacho more economically viable.
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Under previous management, Vital briefly ran Nechalacho as a “demonstration mine” producing a small quantity of ore. The company is now trying a different approach that involves laying the groundwork for a much larger mine.
In Sunday’s news release, Vital said the deal with Strategic Resources will include trialling the new technology – which it said is also designed to reduce the environmental impact of mining at Nechalacho – starting next summer.
Strategic Resources is “a spin-off of Measurement Technology Laboratories,” Vital stated. MTL was founded in 1996 and is headquartered in Minneapolis.
This is not the first time Vital has attracted foreign investment.
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The stake it sold to a Chinese firm in 2023, which led to calls for federal intervention and the eventual involvement of a Crown corporation to block the sale of some Nechalacho ore to China, is understood to remain in place, though it may be diluted by the investment announced on Sunday.
How the federal government now views US investment in Canadian critical minerals remains to be seen, given the seismic shift in US-Canadian economic relations over the past year.
Vital boss Lisa Riley said on Sunday the deal would allow the company to test the new technology’s potential “to be an economic game-changer.”
Strategic Resources’ David Dikken said: “We look forward to working with Vital to move this key North American resource into viable economic production.”
The agremeent gives Strategic Resources two seats on Vital’s board. The company currently lists five board members on its website, including Riley, though one of the five – Zane Lewis – will resign as part of the deal, Vital stated.
