Megado Minerals signs new exploration deal

Megado Minerals (ASX:MEG) has entered an Exploration Agreement with PURE Exploration, a subsidiary of Iluka Resources, for the North Fork Rare Earth Project in Idaho, USA. The agreement includes exploration rights and an option to purchase, structured in three tranches with specified financial terms.

Key details and future prospects of the Megado deal

Megado Minerals has partnered with PURE Exploration, offering them exclusive exploration rights to the North Fork Rare Earth Project in Idaho. The agreement is structured in three tranches. Initially, Iluka will pay Megado A$500,000 and reimburse up to US$110,000 for claim maintenance fees. In the second tranche, Iluka can acquire the project for A$1 million during a two-year exploration period. The third tranche involves a A$2 million payment to Megado upon reaching US$10 million in revenues, or alternatively, a 2% gross revenue royalty. This strategic move allows Megado to leverage its assets through partnerships, potentially increasing shareholder value and establishing a presence in the rare earth mineral market. The ASX has confirmed that no shareholder approval is required for this transaction under ASX Listing Rule 11.2.

Executive insights on strategic partnership

The collaboration with Iluka, a significant player in the industry, positions Megado favorably in the rare earth minerals sector, potentially leading to substantial financial and technological gains.