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Deal done: Astron Corporation, Energy Fuels set for critical minerals JV

Astron Corporation has delivered an impressive resource at its Donald rare earths and minerals sands project in Victoria.

Astron Corporation (ASX: ATR) has officially teamed up with United States-based Energy Fuels to develop its Donald rare earths and mineral sands project in Victoria after executing a binding farm-in and joint venture (JV) agreement.

The two companies have agreed to a revised timeline for the project, with a financial investment decision expected before the end of the year and first production scheduled as soon as 2026. The operation’s total resource across both its Donald and Jackson deposits sits at a whopping 2.63 billion tonnes grading 4.4 per cent heavy minerals (HM).

According to the agreement, Energy Fuels will kick in $183 million towards the first-phase development of the project and will also issue $US17.5 million (AU$26.2 million) worth of its shares to Astron to take a 49 per cent interest in the JV. Astron will retain a 51 per cent share and manage the operation.

The share plan will consist of two tranches, with the first $US3.5 million (AU$5.24 million) worth of stock to be issued once effective conditions are satisfied and then a further US$14 million (AU$20.97 million) package to be delivered after a final investment decision has been approved.

As part of the initial mining phase, the JV will mine 7.5 million tonnes of ore per year to produce about 250,000 tonnes per annum of HM concentrate and about 7000 to 8000 tonnes per year of rare earths concentrate for 41.5 years. The second phase of mining is expected to see those figures double to 15 million tonnes mined each year to produce between 400,000 and 500,000 tonnes of HM concentrate and 13,000 to 14,000 tonnes of rare earths concentrate per annum.

The rare earths will be processed at Energy Fuels’ White Mesa facility in Utah – the only commercial rare earths processing plant in North America capable of producing advanced products from the materials. Astron will have the right to enter into an offtake agreement for 100 per cent of the project’s heavy minerals concentrate for processing at its mineral separation plant in Yingkou.

Management says its processing plan aligns with the Australian Government’s Critical Minerals Strategy and the US Inflation Reduction Act.

In Energy Fuels, we have found a joint venture partner that shares our values, our goals and focus, one that strongly complements our mineral sands experience and aspirations with their own rare earth experience and strategy. We look forward to a long and productive relationship with our new partner to collectively bring to life what, in Donald, is one of the world’s most significant critical mineral resources and delivering value to our respective security holders and stakeholders.
Astron Corporation Managing Director Tiger Brown

The Donald deposit is the company’s most advanced operation and already boasts an 825 million-tonne resource going 4.5 per cent HM, with 17.8 per cent zircon, 7.2 per cent rutile, 28.4 per cent ilmenite, 21.1 per cent leucoxene and 1.7 per cent monazite.

The Jackson deposit is immediately to the south of Donald and is not yet contemplated within the current mine plan. Jackson boasts an 823 million-tonne resource at 4.8 per cent HM.

The Donald project sits in Victoria’s Murray-Darling Basin, about 250km north-west of Melbourne, and is expected to deliver an eye-watering $3.87 billion in free cash during its first-phase mine life of 41.5 years. However, Astron will deliver an updated feasibility study for the operation before the end of the year prior to a final investment decision.

While the farm-in and JV deal is still subject to conditions, the latest step appears to be a win-win for both companies, with the Donald project expected to set the basis for establishing a long-life source of critical minerals.

And the market appears to agree, with Astron shares leaping 30 per cent during intraday trading this morning to touch 84.5c from a previous close of 65c.

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