VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 19, 2012) - Quantum Rare Earth Developments Corp. (TSX VENTURE:QRE)(OTCQX:QREDF)(FRANKFURT:BR3) ("Quantum", the "Company") is pleased to announce that it has finalized the previously announced option of the Company's Australian Jungle Well and Laverton properties (collectively the "Australian Properties").
Under the terms of an option agreement dated September 19, 2011 (the "Florella Option Agreement") (see NR dated November 2, 2011 for full details), the Company granted Florella Holdings Pty Limited ("Florella") the right to earn an 80% interest in the Australian Properties, upon completion of payment of cash and issuance of shares to Quantum. Florella has now assigned a portion of its interest to an unrelated third party Victory Mines Limited ("Victory"), an Australian company currently completing its Initial Public Offering ("IPO") of shares on the Australian Stock Exchange ("ASE"). Victory is headquartered in Perth, Australia. The Company and its Australian subsidiary Northeast Minerals Pty Ltd. ("Northeast") have entered into a comprehensive Joint Venture Agreement (the "JV Agreement") and a Tenement Sale Agreement (the "Transfer Agreement") with Victory, its subsidiary Victory Exploration Pty. Ltd. ("Victory Exploration") and Florella regarding the Joint Venture ("JV") of the Australian Properties.
Under the terms of the Transfer Agreement, Quantum will retain a 20% interest in the Australian Properties, Florella will retain a 10% interest, and Victory will earn a 70% interest in the Australian Properties upon completion of certain events contained in the Transfer Agreement. The interests of Quantum and Florella are carried until such time as commercial production is reached, (as defined in the JV Agreement). To fulfill their obligations under the Transfer Agreement, Victory will be required to reimburse Quantum for costs incurred in exploration work carried out by Quantum on the Australian Properties during the summer of 2011, estimated at approximately $100,000 (Australian dollars), and shall issue to Quantum a total of 3,750,000 common shares of Victory.
Shares issued to Quantum will be subject to escrow provisions as determined by the ASX, which the Company anticipates will result in the release of the Victory shares to Quantum twelve (12) months following completion of the Victory IPO.
The Australian Properties are comprised of the Jungle Well project, located about 40 km west of the town of Leonora, Western Australia and approximately 150 km southwest of Lynas Corporation's Mt. Weld Rare Earth Element Mine, and the Laverton property, located about 45 km north of Mount Weld. The Company performed a surface exploration program in 2011 on the Jungle Well property, taking a total of ten grab samples along the length of the dyke, and all showed highly elevated Total Rare Earth Oxides* ("TREO") values of 0.93% to 12.80% (see November 2, 2011 news release for full details).
*Total Rare Earth Oxides (TREO) include: La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3.
About Victory: Victory mines is a Western Australian based company that has entered into agreements to enable focused exploration for rare earth elements (REE), copper and base metals with potential for uranium, PGE and gold in Western Australia and is currently aiming to list on the Australian Securities Exchange (ASX). For further information visit www.victorymines.com.
About Quantum: Quantum is developing the Elk Creek Carbonatite, the only primary niobium deposit known to be under development in the U.S., and the highest grade undeveloped niobium deposit in North America. Niobium is mainly used in the form of Ferro-Niobium to produce HSLA (High Strength, Low Alloy) steel, to produce lighter, stronger steel for use in automotive, structural and pipeline industries. The U.S. imports 100% of its niobium needs. Niobium is listed as a strategic metal, and is being considered for national stockpiling in the U.S., China, and several European countries.
Cautionary note: This news release contains forward looking statements. These statements include, but are not limited to, statements with respect to the completion of an updated resource estimate, the commencement of a preliminary economic assessment study and management's expectation that the results of these studies will confirm the potential of the Elk Creek Project. Specifically, any statements regarding the potential increase of the Company's inferred resource at the Elk Creek Project and the goals and objectives of the Company are by their nature forward looking information. Resource estimates, unless specifically noted, are considered speculative. The Company has filed a National Instrument 43-101 report on the Elk Creek Project. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve known and unknown risks and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Other factors may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements.
Specific risk factors include risks associated with the ability obtain any necessary approvals, waivers, consents and other requirements necessary or desirable to permit or facilitate the development of the Company's properties, risks associated with project development; the need for additional financing; operational risks associated with exploration activities and results, mining and mineral processing; environmental liability claims and insurance; reliance on key personnel; tax consequences; and other risks and uncertainties.
The business of exploring for minerals involves a high degree of risk.
Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."