Greenland Mines buys rare earth project from Neo Performance for $35M

Greenland Mines (Nasdaq: GRML) has significantly bolstered its portfolio with the acquisition of an advanced exploration asset that is prospective for magnet rare earths neodymium and praseodymium.

In a statement on Thursday, the US-listed company announced it has agreed to acquire the Sarfartoq project in southwest Greenland from Neo Performance Materials (TSX: NEO). As consideration, it will pay a total of $35 million, comprising $20 million cash and $15 million in newly issued shares.

Closing of the acquisition will require approval by the Greenland government.

As part of the transaction, Neo Performance will receive offtake rights on up to 60% of future ore or mineral concentrate production from the Sarfartoq project.

The acquisition, Greenland Mines says, represents a “transformational addition” to its North Atlantic strategy, complementing the company’s existing precious metals and critical minerals project on the Arctic island.

President Bo Møller Stensgaard said the acquisition of Sarfartoq now gives the company “two large-scale critical minerals projects” in Greenland and brings Neo Performance on board as an offtake partner — “connecting an upstream source of Nd-Pr feedstock to Neo’s midstream and downstream magnet platform.”

Shares of Greenland Mines initially rose on the news before erasing its gains. By 11 a.m. ET in New York, it was down 1%, trading at $0.38 apiece with a market capitalization of $45.5 million.

‘Compelling’ rare earth project

In its press release, the company called the Sarfartoq project one of the island’s “most advanced and compelling rare earth projects,” citing its high-grade nature and favorable Arctic logistics.

Located roughly 60 km from Kangerlussuaq, the project is the site of a carbonatite-hosted deposit strongly enriched in Nd and Pr. A historic resource cited by the company showed that it contains roughly 27 million kg of Nd oxides and 8 million kg of Pr oxides, concentrated within one zone holding 5.88 million tonnes of indicated material grading 1.77% TREO (total rare earth oxides) and 2.46 million tonnes inferred grading 1.59% TREO.

These figures, GRML said, place Sarfartoq among the more meaningful Nd-Pr resources in the Western world. High-grade intervals from past drilling included 8 metres of 6.5% TREO, 14 metres of 4.8% TREO and 22 metres of 4% TREO. The REE distribution story is equally distinctive, as Nd-Pr represents approximately 25% to 40% of TREO across the deposit, it added.

Based on existing resources, which were underpinned by 23,000 metres of drilling, metallurgical test work, mineralogy and environmental baseline work, the company plans to continue Neo Performance’s work towards an updated preliminary economic assessment.

Pointing to the project’s upside, Greenland Mines also highlighted a nearby zone that is said has one of the highest known neodymium-to-TREO ratios in the rare earths industry at 45%.

Offtake partnership

The company said it sees a path toward commercial production at Sarfartoq by leveraging its experience in Greenland and more than 15 years of extensive geological and technical work in the project, backed by Neo Performance as an offtake partner and shareholder.

For Neo, the project sale would allow it to focus on its core business as a leading downstream producer of rare earth magnets for the Western market. Last year, the Canadian-based company opened its advanced rare earth magnet plant in Estonia. Recently, it also began producing heavy rare earths on a small scale.

Neo originally acquired Sarfartoq from Hudson Resources in 2022 to secure upstream Nd-Pr feedstock for its rare earth separation activities in Europe and expand regional magnet supply chains.

Shares of the company also fell, dropping nearly 10% for a market capitalization of C$1.2 billion in Toronto.