Union Star Metals has agreed to sell its Brazilian rare earth subsidiary to Harvest Minerals, receiving cash, shares, and milestone payments while sharpening its focus on gold and silver exploration in the US.
- Binding agreement to sell 100% of Brazilian subsidiary Scanty Mineração
- Initial A$200,000 cash plus 40 million Harvest Minerals shares
- Deferred payments linked to resource and development milestones
- Harvest assumes A$1.5 million in deferred vendor payments and royalties
- Strategic shift to focus on US gold and silver projects in Nevada and Idaho
Union Star Exits Brazilian Rare Earths with Mixed Consideration
Union Star Metals (ASX:USM) has taken a decisive step in reshaping its portfolio by signing a binding agreement to sell its entire stake in Brazilian rare earths subsidiary Scanty Mineração Ltda to UK-listed Harvest Minerals (LON: HMI). The deal includes an upfront cash payment of A$200,000, a hefty 40 million fully paid ordinary shares in Harvest, and deferred cash payments totaling A$300,000 contingent on resource declaration and development milestones.
Notably, Harvest will also assume around A$1.5 million of deferred acquisition payments and royalty obligations that Union Star owed to the original vendors, easing future financial commitments for Union Star. Completion hinges on regulatory approvals in Brazil and shareholder consents, leaving some uncertainty on timing.
Strategic Refocus on US Precious Metals Portfolio
This divestment marks the latest phase in Union Star’s strategic transformation, following the recent sale of its Leonora Gold Project and the option agreement over the Kalgoorlie Project. The company is now squarely focused on advancing its gold and silver assets in Nevada and Idaho, USA, particularly its flagship Cobb Creek Project in northern Nevada.
Union Star’s CEO Lucas Stanfield emphasised the simplification of the company’s legacy portfolio, freeing up management and capital to pursue exploration and development in premier mining jurisdictions. The Cobb Creek Project, located along the prolific Independence Trend, has seen significant technical progress, including geological reinterpretation and geophysical studies, setting the stage for a maiden drilling program.
Shareholders Retain Exposure to Brazilian Rare Earth Upside
While Union Star exits direct ownership of its Brazilian rare earth assets, shareholders maintain exposure through the substantial shareholding in Harvest Minerals and the deferred milestone payments. This structure allows Union Star to benefit from potential future resource growth and project development without bearing the ongoing funding obligations, which have been transferred to Harvest.
Harvest’s assumption of vendor payments and royalty commitments further reduces Union Star’s risk profile related to these assets, aligning with the company’s goal of concentrating on precious metals exploration in the US.
Portfolio Rationalisation Accelerates Exploration Plans
Union Star’s refocused strategy is underscored by recent technical advances at Cobb Creek, where multiple high-priority drill targets have been identified beneath shallow cover. The company also holds the Colorado Gulch gold project and Silver Star silver project in Idaho, providing additional exposure to underexplored districts with historical mineralisation.
Completion of this transaction will mark the near end of Union Star’s legacy asset rationalisation, allowing it to channel resources into exploration and development in jurisdictions with established infrastructure and mining-friendly regulations. The move aligns with broader trends of Australian explorers pivoting towards US projects with promising geological potential and clearer pathways to production.
Union Star’s recent deals, including the Kalgoorlie Gold Project sale option, illustrate a consistent strategy of portfolio pruning and capital redeployment, positioning the company for value creation through disciplined exploration and strategic asset management.
Bottom Line?
Union Star’s divestment of its Brazilian rare earth portfolio clears the way for a concentrated push into US precious metals exploration, balancing risk reduction with retained upside through its Harvest Minerals stake.
Questions in the middle?
- How quickly will regulatory approvals be secured to finalise the Harvest Minerals transaction?
- What milestones at Cobb Creek could trigger a significant re-rating for Union Star?
- Will Harvest Minerals successfully develop the Brazilian rare earth assets to justify Union Star’s retained exposure?