Oceana is a member of the Richardson Street stable, a collective of nine companies linked to Steve Parsons and Mike Naylor.

Though Oceana already has a lithium project in Brazil, the acquisition of a rare earths project there is a little different for the group, which skews towards the gold and copper sectors with Oceana’s stablemates including FireFly Metals, Alicanto Minerals and Cygnus Metals.

“I think the feedback was, let’s try and find something a little bit different this time,” Oceana managing director Mick Wilson said of the project search.

“The copper, gold, silver opportunities have been excellent, and it’s worked really well, but the stable was always sort of keen to spread the wings a little bit.”

The latest acquisition came via an old university connection of Oceana chief geologist Natalia Brunacci but had been under private ownership for decades.

While previous owners had been mostly focused on phosphate, Oceana saw the potential for rare earths and niobium.

“Although it’s a relatively early-stage project for the stable, the scale, the grade and potential of what this could be was enough to get us over the line with the backers,” Wilson said.

Wilson was previously at Bellavista and had spent nearly two years assessing projects around the world.

“We got really close on a few things, but it’s the ones we reject,” he said.

“The difference between us and other groups is, it’s got to be one we know we can knock out of the park. This particular project was one of those projects.”

As part of the acquisition, Oceana is raising A$20 million at A36c per share via Canaccord Genuity with Euroz Hartleys co managers.

Wilson said the company was seeking A$15 million and got bids for A$84.8 million.

Directors will subscribe for up to A$550,000, subject to shareholder approval.

The company has also re-jigged its board with the appointment of Alicanto director Russell Curtin as non-executive chairman and Brazilian corporate lawyer Rodrigo Roso and REE geologist Hamish Halliday as non-executive directors.

Serra Negra

Oceana will pay US$2.95 million cash and issue 20 million shares, worth roughly US$5 million, upfront, plus a trailing 2.5% net smelter royalty.

Deferred considerations comprise payments of up to US$2.25 million on the achievement of milestones including an initial resource and defining a resource of 100 million tonnes at 4% total rare earth oxide. 

Serra Negra is a 10km-wide carbonatite complex and is the largest known alkaline carbonatite intrusion in the Alto Paranaíba Igneous Province in Minas Gerais State. 

It is also three times larger than the nearby Araxá complex, which hosts the world’s largest niobium deposit and where St George Mining has recently defined a large rare earths resource.

The 102 holes drilled at the project were not assayed for REE and niobium, but Oceana has completed downhole portable pXRF readings, which indicated the presence of thick REEs.

Laboratory check assays of remaining core material in trays, collected as grab samples from these intervals, returned 7.82% TREO, including 1.34% mixed rare earth oxide at 103m; 8% TREO, including 1.46% MREO at 109m; 7.18% TREO, including 1.15% MREO at 120m; 8.41% TREO, including 1.23% MREO at 138m; 6.06% TREO, including 1.2% MREO at 88m; and 5.49% TREO, including 0.91% MREO at 93m.

“We’ve got about 8000m of core that the vendors had kept in storage, so we’re starting by just going to go back and re-assay that,” Wilson said.

“It’s about $2.5 million worth of core that we don’t have to drill, and it’s actually quite good, because it’s been broadly drilled. 

“The closest holes are 300m apart, so we’ve got this huge data set right across the across the ground.”

Some of the holes have been non JORC assayed by the vendors for light rare earths, which were present.

“There’s plenty of other holes outside of that area that haven’t been assayed at all, so we don’t actually even know what we’ve got yet. It could be ridiculously big,” Wilson said.

As soon as the deal closes, Oceana plans to launch an accelerated 20,000m drill program.

“What we’ll look to do is build a resource base early now, probably being inferred to start with, of course,” Wilson said.

“There’s an area where we know we’ve got decent rare earths grades and decent widths, so we’ll probably just get in there and build around that.”

Oceana will also undertake detailed geophysics work, which has never been done at the project.

The company will also start metallurgical test work and has engaged geo-metallurgist Dr Stuart Owen to advise on that work.

“That’ll give us then a really clear understanding of where the rare earths sit in the complex,” Wilson said. 

“We believe it’s monazite. We’ve done a couple of samples already, so that’s great. That’s probably the best mineral you can have for this, but again, we don’t know the distribution yet.”