American Rare Earths’ Wyoming project sparks SPAC interest
Australia-headquartered American Rare Earths has confirmed that its Halleck Creek project, in Wyoming, has captured the interest of a special purpose acquisition company (SPAC). However, the company has decided not to pursue any proposal at this stage.
The SPAC approached American Rare Earths with a proposal to acquire Wyoming Rare (USA), the entity holding the 2.34-billion-tonne Halleck Creek project. Under the proposal, Wyoming would be listed with the SPAC in a separate entity on the Nasdaq.
While acknowledging the potential benefits of such a proposal, drawing parallels to the successful listing of Mountain Pass by MP Materials through a SPAC combination, the board of American Rare Earths remains focused on maximising returns to shareholders while minimising dilution.
“The inbound interest received in American Rare Earths underscores the immense value and strategic significance of our Halleck Creek rare earth project,” said chairperson Richard Hudson, who was appointed to the position in February.
In March, the company unveiled the results of the Halleck scoping study, revealing a net present value, at an 8% discount, of $673.9-million, an internal rate of return of 22.5% and a payback of 2.9 years, with a total initial capital expenditure of $456.1-million.
The study is based on an initial phase of three-million tonnes a year of mining to create a low capital cost for market entry and finance. A six-million-tonne-a-year economic case was prepared to illustrate future potential.
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