Aclara Resources (ARA.TO) has announced it has entered into an agreement with CAP, a Chilean company, whereby the latter will invest an initial US$29M in REE Uno, Aclara’s subsidiary which owns the REE project in the country. CAP will receive a 20% stake in the subsidiary which basically means the pro-forma value of the subsidiary is now US$145M of which US$116M is attributable to Aclara. Aclara will receive the cash payments in three tranches with US$9.7M payable right away, US$12.5M will be payable in January 2025 and the final tranche of US$6.9M will be payable in January 2026.
Subsequently to completing this initial agreement and the subsidiary securing the environmental permit for the project, CAP has the option to acquire an additional 20% stake in the subsidiary for US$50M. Not only does the cash inflow help Aclara to continue to work on both the Chilean and its Brazilian assets, while having a local Chilean partner could perhaps be helpful in the permitting process.
Disclosure: The author has a small long position in Aclara Resources. Please read the disclaimer.
