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Australian Strategic Materials (ASM) has signed an exclusive option agreement with Caspin Resources, a Western Australian precious metals explorer.

The agreement will allow ASM to enter into a joint venture agreement to earn up to 75 per cent of the rare earth element rights (REE) in Caspin’s Mount Squires project, located in the West Musgrave region of WA.

Caspin will farm out and retain a 25 per cent free carry (up to a decision to mine) of the REE rights on the project and will receive milestone payments of up to $1.5 million.

“We’re excited to be collaborating with ASM on the rare earth opportunity at Mount Squires, a reputable and specialist REE company,” Caspin Resources managing director Greg Miles said.

“Caspin will retain exposure to the REE potential without any funding obligation and potentially receive milestone payments. This will allow Caspin to maintain its focus on the nickel, copper and gold potential at Mount Squires and other acquisition opportunities.

“We believe that the high proportion of high value, heavy rare earths, close to surface in an area with no previous exploration for rare earths, sets the Mount Squires REE project apart from its peers.

“However, the road to commercialisation of rare earth projects can be incredibly complex and high risk. Partnering with ASM, an established REE developer, provides a huge advantage to evaluate the economic viability of the Mount Squires REE project.”

The agreement also aligns with ASM’s mine-to-metals strategy, which involves identifying additional REE sources to supplement its Dubbo rare earths project.

Subject to confirmation from metallurgical testing, REE from Mount Squires may be converted to a concentrate form for processing at the Dubbo project separation and refining facility to create high-purity rare earth oxides.

“We are pleased to collaborate with Caspin to identify further raw material supply for ASM’s Dubbo project separation and refining facility,” ASM managing director and chief executive officer Rowena Smith said.

“This opportunity aligns with our mine to metals strategy to broaden its rare earth supply, particularly for high value heavy rare earths. Additionally, we see real value in developing the Dubbo project as a rare earth separation and refining hub with the ability to unlock value for potential rare earth projects across Australia.”

REE metallurgical testwork and drilling is expected to be undertaken by ASM at Mount Squires over the next 3–9 months, prior to ASM deciding whether to exercise its option to enter into a joint venture agreement with Caspin.