Vital Metals Limited has informed Quebec Precious Metals Corporation (QPM) it will not pursue the acquisition of the Kipawa and Zeus exploration projects in Quebec.
In a statement, Vital Metals said it was supposed to acquire 68 per cent interest in the Kipawa exploration project and 100 per cent interest in the Zeus exploration project.
Vital Metals’ new management is dissatisfied with the results of its due diligence on the Projects, particularly its ability to advance its understanding of the Kipawa (Kebaowek) First Nation’s stated opposition to the Projects and determine whether support from the First Nation can ever be obtained for Vital Metals’ exploration and development of the Projects.
Vital Metals is also dissatisfied with prior management’s technological due diligence, which attempted to use alternative development and processing processes. Vital Metals has informed QPM of its decision to cancel the agreement due to an inability to reach an agreement on terms to prolong the due diligence period in order for Vital Metals to minimise risk further.
According to Vital Metals, it has realised that, given the excellent potential of the assets it presently owns, proceeding with the acquisition would divert cash from its current high-priority Nechalacho Project building, not to mention that development of the Kipawa and Zeus Projects would take several years.
Vital Metals further stated that it would continue to focus on its Saskatoon rare earths production facility and the development of the Tardiff deposit at Nechalacho in the Northwest Territories, Canada, which will consume all resources in the short to medium term.
Furthermore, Vital Metals added it has the potential to exploit the previously observed xenotime mineralisation at Nechalacho’s North T pit, which is located near the bottom of the present mining area. Vital Metals’ ambition of generating commercial amounts of both light and heavy rare earths would be realised if this mineralisation is developed.
“We see significantly more value for our shareholders in aggressively advancing Stage 1 and 2 of our Nechalacho Project and in our existing Project pipeline, rather than being distracted on less rewarding opportunities,” Vital Metals Interim CEO Russell Bradford said.
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