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

Greenland Mines (Nasdaq: GRML) is acquiring an advanced exploration asset that is prospective for magnet rare earths neodymium and praseodymium.

Charlotte, North Caroline-based Greenland Mines will buy the Sarfartoq project in southwest Greenland from Neo Performance Materials (TSX: NEO), according to a statement Thursday. The $35 million (C$48 million) purchase price includes $20 million cash and $15 million in newly issued shares.

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

Sarfartoq gives Greenland Mines “two large-scale critical minerals projects” in Greenland and brings Neo Performance on board as an offtake partner, President Bo Møller Stensgaard said.

Greenland Mines shares rose about 1% to 39¢ apiece Thursday afternoon for market capitalization of about $47 million. Neo Performance plunged 7.7% to C$28.61 in Toronto for a market value of about C$1.2 billion ($870 million).

‘Compelling’ 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 neodymium and praseodymium. A historic resource cited by the company showed that it contains roughly 27 million kg of neodymium oxides and 8 million kg of praseodymium 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 inferred tonnes grading 1.59% TREO.

These figures place Sarfartoq among the more meaningful neodymium-praseodymium resources in the Western world, Greenland Mines says. 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 neodymium and praseodymium represent about 25% to 40% of TREO across the deposit, it added.

Upcoming PEA

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.

Greenland Mines also highlighted a nearby zone that it said has one of the highest known neodymium-to-TREO ratios in the rare earths industry at 45%.

The company 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 an advanced rare earth magnet plant in Estonia. It subsequently began producing heavy rare earths on a small scale.

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