ASX rare earths stock Oceana Metals Ltd (ASX: OCN) is off to the races on Tuesday.
If you haven't seen Oceana Metals shares on the boards lately, that's because the stock entered a trading halt on 13 February pending an announcement about a proposed acquisition.
That announcement has been a long time coming!
But today the ASX rare earths stock is back in action after releasing the long-awaited acquisition news.
And investors are responding very enthusiastically.
On 12 February, Oceana Metals shares closed at 43.5 cents. In earlier trade today, shares were trading for 73.0 cents apiece, up a whopping 67.8%. After some likely profit taking, shares are currently trading for 60.5 cents each, up 39.1%.
For some context, the All Ordinaries Index (ASX: XAO) is down 0.5% at this same time.
Here's what we know.
Image source: Getty Images
ASX rare earths stock rockets on Brazil mine purchase
Oceana Metals shares are surging today after the miner reported that it has entered into a binding agreement with private vendors to acquire 100% of the Serra Negra rare earths and niobium project, located in Brazil.
The ASX rare earths stock said it will acquire the project by purchasing Songeo Mineracao, the company holding the Serra Negra permits. On completion, this will provide Oceans with full ownership and control, enabling it to advance the project through resource definition and development studies.
According to the release, Serra Negra, a 10-kilometre-wide carbonatite complex. This makes it the largest known alkaline carbonatite intrusion in the Alto Paranaiba Igneous Province.
Oceana said it will pay a total upfront and deferred consideration of up to US$10.3 million in cash and shares for the rare earths project, as well as a trailing 2.5% net smelter royalty.
The ASX rare earths stock noted that it has received "firm commitments" for a $20 million share placement, anchored by domestic and international institutional, professional and sophisticated investors. Oceana plans to use the new funds for the Serra Negra acquisition and an accelerated exploration program.
What did Oceana Metals management say?
"This is an outstanding opportunity to acquire a global-scale rare earths and niobium project in a tier-one location," Oceana Managing Director, Mick Wilson said. "The Serra Negra Project will transform Oceana and give our shareholders exposure to a critical minerals project with huge scope for growth."
Looking to what's next for the ASX rare earths stock, Wilson added:
Our recent due diligence and site visit confirmed a large quantity of historic core remains available for re-assay (around 8,000 metres) and our technical team has already made preparations to do this.
At the same time, we are planning surveys of modern geophysics, and plan to commence an accelerated 20,000 metre drill program, in what will be the first drilling program at Serra Negra in well over a decade.
