Greenland Minerals and Energy negotiates extension to settlement agreement with Westrip / Rimbal

Greenland Minerals and Energy (ASX: GGG) has negotiated an extension to the settlement agreement with Westrip Holdings (and Rimbal Pty Ltd) to acquire the outstanding 39% of the exploration license 2010/02 over the northern Ilimaussaq Complex in Greenland.

Finalisation of the settlement agreement will see Greenland Minerals move to 100% ownership of the Kvanefjeld multi-element project.

The company said that the terms of the settlement remain as previously announced in August, however the settlement date has been extended to June 15th, 2012.


Funding the agreement
Also of note is that the deposit that was placed as security over the settlement has been adjusted. Greenland Minerals has agreed to swap the A$5 million cash deposit with shares to the value of $3.5 million as at the date of extension, but retains an option to cancel the shares and pay cash if the value of those shares is more than $4 million at June 15th, 2012.

The company has also released $1.5 million to the counterparties, and has received back the remaining $3.5 million of the cash deposit. The $1.5 million has been deducted from the total amount payable.

Greenland Minerals is looking to reach several key milestones in the coming months, with the board saying it is confident that it will be well positioned during the first half of 2012 to satisfy the requirements of the settlement agreement, on terms that will be value-accretive for shareholders.


2010/02 hosts world class rare earths deposit

The license 2010/02 contains the Kvanefjeld multi-element deposit (rare earth elements, uranium, zinc) and nearby satellite deposits, zone 2 and 3.

The attraction of Kvanefjeld is clear. It hosts the largest occurrence of rare earths (6.6 million tonnes total rare earth oxides (TREO)) as defined by internationally recognised standards, 350 million pounds uranium and 3 billion pounds of zinc.

And these current resources do not even include zone 2 or 3. Resource estimates for these zones are expected later this year, and are likely to lead to a further boost to total resources at Kvanefjeld. 


Consideration for 100% ownership - announced in August

As consideration (which was announced in August 2011) for moving to 100% ownership of Kvanefjeld and the cancelation of the joint venture and all cessation of all legal activity, Greenland Minerals will pay A$39 million in cash, 8,125,000 shares, and 5,000,000 options (ex $1.50) in Greenland Minerals to all shareholders of the joint venture vehicle Westrip.

In addition, Greenland Minerals has also entered into an agreement with Rimbal to provide it with off-take rights regarding lujavrite from the Greenlandic license 2010/24 immediately to the south of the northern Ilimaussaq license. Lujavrite is the rock-type that is host to REE-U-Zn mineralization at Kvanefjeld, consideration for this off take is AU$1.00.

Finally, the agreement includes the dismissal of all legal proceedings with no orders as to costs, dismissal of the UK Proceedings and the lifting of the injunction granted thereunder also with no order as to costs. The transaction is also subject to shareholder and regulatory approval.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23398/greenland-minerals-and-energy-negotiates-extension-to-settlement-agreement-with-westrip-rimbal-23398.html