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Great Western Minerals Group Ltd. announced that the joint venture agreement with Ganzhou Qiandong Rare Earth Group Ltd. of China for the construction of a rare earth separation plant in South Africa has been completed and signed.
Pursuant to the Agreement, the newly created joint venture company, Great Western GQD Rare Earth Materials Proprietary Limited will immediately finalize the preliminary work already underway on the process design and environmental components of the separation plant and move toward construction of the facility. A wholly owned subsidiary of GWMG will own mixed rare earth chlorides, which GWGQD will process under a tolling agreement. The Agreement provides that GWGQD will separate mixed rare earths into products usable by GWMG's wholly owned subsidiary, Less Common Metals Limited, and third party customers. Under the terms of the Agreement, GQD receives 25% of the shares of GWGQD for its contribution to design and construction of the facility, and $7.5 Million of GWMG shares to be paid over three years contingent on the facility being fully commissioned and operating effectively, and fees and/or dividends for providing long term management support for the operation of the separation facility. The separation plant will be constructed in close proximity to GWMG's Steenkampskraal operation where the previously operating mine is being refurbished and readied in anticipation of rare earth mining. GQD is a highly respected processor of Rare Earth oxides and metals with over twenty years of operational experience in China during which time it has been a significant supplier of metals and oxides to LCM. GWMG President and Chief Executive Officer Jim Engdahl said, "This agreement represents one of the single most significant milestones in the history of GWMG. We are exceptionally pleased to have concluded such an important agreement between our Company and GQD for the construction and operation of a rare earth separation plant. Our agreement with GQD, with its two decades of rare earth processing experience, means that we have successfully engaged a rare earth industry leader as a joint venture partner to execute the separation component of our Company's plan to be the most fully integrated rare earth processing company outside of China." Mr. Bin Gong, Chief Executive Officer of GQD said, "The signing of this joint venture agreement between GQD and GWMG represents a landmark development in the rare earth industry. This agreement sets the foundation for our two companies to proceed to full development of a separation facility within our joint venture. While it may have taken us longer than expected to get to this point, the complexities of such a groundbreaking agreement should not be underestimated. However, we are now in a position to allow the joint venture to proceed with all haste. Everybody at GQD looks forward to a long and rewarding relationship with GWMG." |
