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Forge Resources Ltd (ASX:FRG) has confirmed that it has struck a deal with Lynas Corporation Ltd (ASX:LYC) for the purchase and potential development of the Crown Rare Metals and the Swan Phosphate deposits.
Forge will pay Lynas $20.7 million cash, plus 7 million options to acquire Forge shares with a five year expiry from the date of issue.
In addition, upon production Forge will pay Lynas ongoing royalty payments. The royalty equals 1 per cent of the gross revenue received by Forge from the sale of the minerals recovered from the areas.
Lynas shareholders are also to receive priority entitlement in Forge’s $31 million capital raising.
The master agreement with Lynas is to sub-lease designated areas within the existing Mt Weld mining leases in Western Australia, and is still subject to shareholder approval.
Nicholas Curtis is chairman for both Lynas Corporation and Forge Resources.
Lynas Corporation posted a net loss of $20.5 million in the first six months of its 2011 financial year.
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