Rare Earth Elements Market Opportunity

RNS Number : 3263E

Amala Foods PLC

10 March 2022

 

Amala Foods Plc

( " Amala " or the " Company")

Rare Earth Elements Market Opportunity

Amala Foods Plc (LON: DISH) is pleased to announce further information regarding the Rare Earth Elements (REE) market opportunity that was first announced on 17 February 2022.

The current geopolitical turmoil and rising energy prices are likely to result in western economies accelerating the shift towards the "green economy" as they continue to seek to reduce their reliance on fossil fuels.  The electrification of the energy used to drive machinery is a key part of the energy transition and one of the most significant energy shifts in history.  Magnet metals are central to this transition and critical to manufacturing applications such as electric vehicles and wind turbines.  Provenance of critical rare earth materials will become significant factors in supply chains.  Prices of Praseodymium-Neodymium Oxide (NdPr) continue to rise driven by burgeoning demand and growing shortage of supply in China.

Terra Rara UK Ltd and Terras Raras De Angola Limitada, its Angolan subsidiary, have a team of geologists on the ground who are progressing the REE projects.  The historical grades from diamond drilling of Total Rare Earth Oxides (TREO) were announced on 17 February 2022 and these very high-grade drill intersections demonstrate the prospectivity of the project.  The Mungo Rare Earth Elements project is located approximately 150 kilometers from Pensana Plc's Longonjo Project. 

The work on this project will include additional soil geochemistry, ground truthing previous diamond drilling allowing for the planning of the next phase of RC and Diamond drilling, and the establishment of the camp and infrastructure required to support the next phase of drilling. A 5,000 metre Reverse Circulation and Diamond Drill campaign will then follow and will be designed to move the project toward an initial mineral resource estimate.

An important aspect for a project such as Mungo is access to infrastructure, and as with the Pensana Longonjo project, Mungo is well placed being close to world class rail, port and power infrastructure. The Benguela Railway line lies less than 100 kilometres from the project and runs to Lobito Port, one of the largest and most modern ports on the West coast of Africa. The project also lies within 50 kilometres of the north Angola Hydro power interconnection which means that the project will have access to renewable energy. The Gove and Ruacana Hydropower stations lie approximately 250 kilometres south of the project.   

The high-grade results from the drilling to date on the Mungo project combined with access to world class infrastructure mean that Mungo has the potential to become a low capex and low opex REE project.

In Uganda, through Terra Rara Uganda Limited, the in-country work program over the next 12 months will focus on soil geochemistry over areas identified by aeromag survey. The soil geochemistry results will provide drill targets for the next phase of work.

The Company will update the market as progress continues towards the execution of a Sale and Purchase Agreement (SPA).  Whilst the Directors are optimistic that the transaction will conclude, there however can be no guarantees.

Gerard Kisbey Green, Executive Director of Tera Rara UK, commented :

"Having access to high quality exploration data that was carried out by a Tier 1 mining company is a great start to a project. The analysis of this exploration data shows high - grade results in all the holes drilled and assayed to date and then when you consider that Mungo has close access to world class Rail, Port and Power we are confident albeit early in the project that Mungo has the potential to become a significant REE project" 

Aidan Bishop, Director, Amala Foods Plc, commented:

"Since the previous announcement on 2 March 2022 there have been further expressions of interests to provide finance to bring this transaction to a successful conclusion.  I am pleased with the progress being made on this potential transaction that if successful will result in a complete transformation for the Company.  The Company announced previously that based on the current number of outstanding shares, if successful, the transaction would result in a ' see through ' valuation of approximately 2p per share."

Enquiries:

Jonathan Morley-Kirk, Non-Executive Chairman

[e-mail]  

 

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