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Caspin Resources secures rare earths opportunity with Australian Strategic Materials

10 April 2024 09:46

Caspin Resources Limited (ASX:CPN) has strategically advanced its rare earth element (REE) potential at the Mount Squires Project in Western Australia by securing an exclusive option agreement with Australian Strategic Materials Limited (ASM)(ASX:ASM, OTC:ASMMF), allowing Caspin to maintain a 25 percent free carry interest in the REE rights while ASM spearheads exploration and development efforts.

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Figure 1: Mount Squires tenements and prospects

Partnership details

The agreement permits ASM to enter into a joint venture agreement with Caspin, potentially earning up to 75 percent of the rare earth element rights in Caspin’s Mount Squires Project, located in the West Musgrave region of WA.

In return, Caspin retains a 25 percent free carry of the REE rights on the Project, with milestone payments of up to $1.5 million.

This collaboration allows Caspin to maintain its focus on nickel, copper, and gold opportunities at Mount Squires while benefiting from exposure to the REE potential without any funding obligation.

Unlocking rare earth potential

Caspin’s 100 percent owned Mount Squires Project holds promise due to its significant proportion of high-value heavy rare earths, located close to the surface and in an area with no previous exploration for rare earths.

Since its first discovery of substantial REE mineralisation in the West Musgrave Province in May 2023, Caspin has concentrated its efforts on enhancing its comprehension of REE mineralisation, described as a hydrothermal volcanic-style with a significant proportion of high-value heavy rare earths.

This unique characteristic sets it apart from its peers and presents an opportunity for both companies to tap into the valuable resource, offering significant advantages in navigating the intricate and high-risk path to commercialising rare earth projects.

Caspin Resources‘ Managing Director, Greg Miles, highlighted, “The road to commercialisation of rare earth projects can be incredibly complex and high risk. Partnering with ASM, an established REE developer, provides a huge advantage to evaluate the economic viability of the Mount Squires REE Project.”

Leveraging ASM’s in-house technical expertise, Caspin stands to gain insights into the economic extraction of REEs at Mount Squires, potentially paving the way to market through ASM’s Dubbo Project development and established supply chains.

Exploration & development plans

Pending confirmation through metallurgical testing, the Project’s REEs could be converted into a concentrated form, subsequently undergoing processing at the Dubbo Project’s separation and refining facility to yield high-purity rare earth oxides.

As stipulated in the option agreement, ASM will conduct metallurgical testing and drilling initiatives within the next 3-9 months to assess this potential before determining whether to exercise its option for a joint venture agreement with Caspin.

CPN’s Australian Security Exchange-listed share price has risen 10.96% today and is currently trading at $0.081 (9:45 am UTC+ 8 hours).

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