Lynas Rare Earths is set to acquire Meteoric Resources in an all-share deal valued at about A$968 million, bringing Brazil’s Caldeira rare earths project into the portfolio of one of the world’s leading rare earths producers.
Under a binding Scheme Implementation Deed, Lynas will seek to acquire all Meteoric shares through a court-approved scheme of arrangement under Part 5.1 of the Corporations Act 2001.
The deal gives Lynas access to Caldeira, in Brazil’s Minas Gerais state, which Meteoric describes as the largest known ionic clay JORC rare earth oxide Mineral Resource outside China. The project has also completed a definitive feasibility study.
Under the proposed transaction, Meteoric shareholders will receive 0.0207 Lynas shares for every Meteoric share. Based on Lynas’ 60-day volume-weighted average price, the deal implies an equity value of approximately A$968 million.
The implied consideration represents:
A$0.286 per Meteoric share, a 68.4% premium to Meteoric’s last closing price of A$0.1706.
A$0.310 per share, a 57.6% premium to Meteoric’s 30-day VWAP of A$0.1977.
A$0.316 per share, a 64.2% premium to Meteoric’s 60-day VWAP of A$0.1938.
The proposed acquisition would significantly expand Lynas’ resource base, adding an ionic clay deposit to its existing hard-rock Mt Weld operation in Western Australia.
Caldeira is estimated to contain 802,000 tonnes of NdPr oxides and 41,000 tonnes of DyTb oxides within Meteoric’s reported Mineral Resources. On a pro forma arithmetic basis, the acquisition would increase Lynas’ reported Measured and Indicated TREO Mineral Resources by about 79% and its reported Ore Reserve by about 26%.
The project’s DFS production target points to average annual output of approximately 3,862 tonnes of NdPr and 127 tonnes of DyTb over its life, potentially providing Lynas with a new source of both light and heavy rare earths.
The acquisition also gives Lynas a foothold in Brazil, with the potential to integrate Caldeira’s production into its existing downstream operations in Malaysia while exploring downstream processing opportunities in Brazil.
Lynas intends to retain and work with Meteoric’s existing team following completion of the transaction, citing its Brazilian expertise, local relationships and knowledge of the Caldeira orebody.
Lynas Rare Earths Board Chair Prof John Humphrey said: "Lynas is very pleased with the potential to bring together the Caldeira deposit which is the largest known ionic clay rare earth Mineral Resource outside China reported in accordance with the JORC Code, and Lynas’ high grade Mt Weld deposit and leading rare earth operations.
"This will deliver on our Towards 2030 growth objective of adding resource and scale. Expanding our operations into a new country will help Lynas maintain its leading position in the global rare earths supply chain and meet increased customer demand for rare earth materials."
“Brazil is a well-established and supportive mining jurisdiction and its rare earth reserves are the largest outside China. We have enjoyed getting to know Andrew and his team and congratulate Meteoric on their achievements to date, including extensive knowledge of the ore body and ionic clays, the integration of sustainability initiatives into project design, and the completion of a technically robust DFS."
"With Lynas’ proven expertise and strong balance sheet, we will continue this excellent work with the local team, the Government of Brazil and local communities to achieve the Project’s full potential,” Prof Humphrey continued.
“We look forward to welcoming Meteoric’s shareholders to the Lynas share register and continuing to build value for all shareholders."
Meteoric Executive Chair Andrew Tunks said: "I am very proud that the work of our team has attracted a partner of Lynas Rare Earths' calibre to Caldeira. This project has been progressed with an intensive focus on the fundamentals: drilling, geological understanding, metallurgical recoveries and test work, including from our own pilot plant.
"That discipline is why Caldeira stands where it does today: an orebody that is high grade, highly recoverable, low in capital intensity, low in operating cost, and highly scalable. Meteoric has a great team of people who have developed significant intellectual property on this ionic clay project.
“We have worked hand in hand with our host communities, Indigenous stakeholders, and government at the municipal, state and federal levels. As part of this transaction, Lynas has engaged directly with the Federal Government and BNDES to ensure no delay in the development of Caldeira."
He added: "The efforts of the Meteoric team have culminated in Lynas, one of the world's leading rare earths companies, validating the quality of the Project through the proposed transaction, which will allow our shareholders to gain access to Lynas' skills and capabilities.
"Through this process, I have built a strong relationship with John Humphrey and the Lynas senior leadership team, and have the greatest confidence in Lynas' ability to deliver. Lynas brings technical expertise, global credibility and balance sheet strength to fast-track the development of Caldeira. Together we see a long future leading the development and industrialisation of the rare earths industry in Brazil”.
Meteoric’s board has unanimously recommended the scheme, subject to an independent expert concluding, and continuing to conclude, that the transaction is in the best interests of Meteoric shareholders and provided no superior proposal emerges.
Meteoric directors, who collectively hold 2.6% of the company’s outstanding ordinary shares, have indicated they intend to vote in favour of the deal subject to the same conditions.
Meteoric’s largest shareholder, Tolga Kumova and associated entities, which collectively hold about 6.7% of the company’s issued shares, have also indicated they intend to vote in favour of the scheme under the same conditions.
For Lynas, the transaction represents a major step in its Towards 2030 strategy to add resource and scale, while giving the company exposure to Brazil’s emerging rare earths sector and Caldeira’s potential production of critical rare earth elements.
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