* New company to have market cap of A$23.4 million
* Will drill immediately to define rare earth deposit
* Expects new resource estimate in September
By Julie Gordon
TORONTO, March 8 (Reuters) - Hastings Rare Metals will list on the Australian Stock Exchange on Wednesday as part of a reverse takeover deal with Augustus Minerals AUJ.AX , the chairman of the new company said on Tuesday.
“It was the right vehicle for us to go with, and the right partners,” said Hastings Chairman David Nolan in an interview with Reuters on the sidelines of the PDAC prospectors and developers conference.
The combined company, which will use the ticker symbol “HAS” and operate under the Hastings name, will focus on developing the Hastings rare earth project in Western Australia and will have a market capitalization of A$23.4 million ($23.1 million), said Nolan.
The Hastings project has a historical resource of 22 million tonnes, and contains tantallum, niobium and rare earths, among other metals. The company hopes to double the official resource this year through new drilling.
Rare earths are gaining investor favor as concern over supply mounts because of Chinese export cuts. China is the world’s top producer of the the 17 rare earth metals, used in everything from smartphones to electric cars.
Rare earths, while not particularly rare, are difficult to find in economically viable deposits.
Nolan said that the Hasting deposit has a high percentage of dysprosium, a rare earth in high demand for use in electric vehicles, but he added that only two drill holes so far have been tested for rare earths.
The company, which has A$6 million in the bank, will spend the next few months defining the rare earth deposit. It expects to file an official resource update in September.
“We want to prove up the in-situ value and establish the rare earth elements we know are there,” said Nolan. “The market wants fresh drilling results.”
Rare earth exploration outfits have performed well in the past year, with Australia’s Arafura (ARU.AX) doubling in the past 12 months, while Canada’s Rare Element Resources RES.V has quadrupled in the same period.
Edited by Frank McGurty