Summit Minerals is set to expand its portfolio with the acquisition of the high-grade Mundo Novo Niobium-Rare Earth Element-Phosphate Carbonatite project in central Brazil.
The company has signed a binding letter of intent for the acquisition, which is pending shareholder approval and due diligence.
The acquisition includes two National Mining Agency tenements covering an area of 17.2km², with Summit Minerals Brasil Mineração, a wholly owned subsidiary, facilitating the purchase from Neofertil and E2 Minerals.
The financial terms of the agreement include a series of cash payments totalling A$5.17m, with the first payment of A$2.2m due upon execution of the definitive agreement.
Additional payments are structured over a five-year period and linked to project milestones such as the discovery of a maiden mineral resource estimate and the preparation of a bankable feasibility study.
Moreover, Summit will issue shares worth A$4m to the sellers in increments, the first of which will also coincide with the execution of the definitive agreement. The sellers retain the right to continue phosphate mining activities within the tenements.
Summit will also grant the sellers a 2% net smelter return royalty on the project.
Summit managing director Gower He said: “We are thrilled with the potential acquisition of the Mundo Novo Carbonatite project, a key investment in the niobium and rare earth element sector. This investment is driven by strong long-term demand linked to the global clean energy transition and advancements in decarbonisation technologies.
“Mundo Novo has shown substantial potential for niobium, rare earth element and phosphate mineralisation, as evidenced by past drilling results that revealed considerable intercept widths. The project's geological potential aligns perfectly with our strategy to develop high-quality projects in Brazil that supply critical metals for the electric vehicle market and other clean energy applications.”
In September 2024, Summit Minerals agreed to acquire a new tenement within the Borborema Pegmatitic Province to expand its Equador Niobium and Tantalum project in north-east Brazil.
