The Vital Metals Limited (ASX: VML) share price is gaining in late morning trade, up 4%.
Below we look at the latest announcement from the ASX resource share and rare earths explorer.
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What did the company report?
Vital Metals' share price is moving higher after the company reported it received formal acceptance from its offtake partner, REEtec AS, for its rare earth carbonate sample.
The 12-kilogram rare earth carbonate sample was produced at Vital Metal's Nechalacho project in Canada in March this year.
Commenting on the development, Vital Metals' Managing Director Geoff Atkins said:
Customer acceptance from REEtec is a key milestone for the development of the Nechalacho rare earth project and the construction of our Extraction Plant in Saskatoon. This achievement demonstrates that we have our processes at Nechalacho working correctly and we can proceed in line with our plans.
With the satisfaction of this milestone, the procurement of equipment for our Rare Earth Extraction Plant in Saskatoon will proceed.
Vital Metals executed a definitive Offtake Agreement with REEtec on 2 February. That stipulated that Vital Metals will provide REEtec with 1,000 tonnes of rare earth oxides (REO) per year over five years. Both REEtec and Vital Metals have the option to increase the offtake volume by as much as 5,000 tonnes REO annually over 10 years.
The company said it will commence production via ore sorting in June. It is on track to become only the second rare earth producer in North America and the first in Canada.
Vital Metals share price snap shot
Vital Metals' shareholders have enjoyed a very strong year. Demand for rare earths, critical to most modern tech devices, sourced outside of China is growing rapidly. This has helped drive its shares up 480% over the past 12 months. Over that same time, the All Ordinaries Index (ASX: XAO) gained 25%.
Year-to-date, the Vital Metals share price has continued to outperform, up 93% so far in 2021.
