IM Rare Earths News in Brief 5 – 11 January

By Laura Syrett
Published: Monday, 11 January 2016

Molycorp gets go-ahead for auction plan; Arafura signs MoU for JV with Korea’s OCI.

US rare earths miner Molycorp Inc. has won legal approval to put the company up for auction, according to a report by the Denver Business Journal.

The bankruptcy court in Wilmington, Delaware, agreed late last week to Molycorp’s auction terms, following two months of mediation between the company and its creditors.

The Denver-based rare earths producer, which owns the Mountain Pass rare earths mine in California, has been battling with its creditors over plans to exit Chapter 11 bankruptcy, which it filed for in June last year. Some of its lenders felt that the company’s proposed route out of bankruptcy favoured one particular lender, Oaktree Capital Management LP, at the expense of others.

Under the newly approved plan, Molycorp will seek bids for its assets that are high enough to enable it to repay its creditors. Earlier last week, Bloomberg reported that Chinese rare earths miner Shenghe Resources Holding Co. and ASX-listed lithium mineral Galaxy Resources Ltd had made offers for Molycorp that exceeded its $443m estimate of its own value.

Australia-based Arafura Resources Ltd has signed a memorandum of understanding (MoU) with South Korean chemical manufacturer, OCI Co. Ltd, to negotiate proposals for joint venture (JV) rare earths separation plant in South Korea.

Under the terms of the JV, Seoul-headquartered OCI would provide reagents for the separation plant and for Arafura’s Nolans rare earths project in Australia. It would also supply the ASX-listed miner with access to infrastructure and services in relation to the plant.

The two companies intend to collaborate on R&D into rare earths separation and aim to establish a business model whereby the parties jointly fund the establishment of the South Korean facility, for toll processing Nolans ore into either rare earths intermediate or carbonate products.

OCI will also make an equity investment in Arafura, should the JV go ahead.

Over the border, privately-held SRE Minerals Ltd is reported to be progressing its JV with North Korea’s Korea Natural Resources Trading Co. to develop the Jongju rare earths project, which SRE estimates contains a mineral resource of around 6bn tonnes.

A report by Australian Mining said that the venture is in progress, with around 35,100 metres of trenching completed over the deposit and a 5,700 tonne bulk sample prepared for analysis. The company said that it would report data for the project in accordance with JORC guidelines.

The Australian Mining article quoted statistics from the Korea International Trade Association, which indicated that North Korea exported 62,662kg rare earth elements last year.

In financing news, TSX-V-listed Commerce Resources Corp. has closed the final tranche of a two part non-brokered, flow-through private placement for gross proceeds of Canadian dollar (C$)1.974m ($1.4m*).

The funds will be used for exploration activities at the company’s Ashram rare earths project in Quebec, Canada.

*Conversions made January 2016

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