Street Calls of the Week
Investing.com - Rare earth elements miner Tactical Resources) has announced progress with the U.S. government as part of its ongoing work to close a planned listing on the Nasdaq stock exchange via a merger with a blank-check firm.
In a statement on Thursday, Vancouver-based Tactical Resources said its registration statement regarding the proposed flotation through a tie-up with special purpose acquisition vehicle Plum Acquisition III Corp is currently being reviewed by U.S. regulators, adding that the "customary closing conditions" of the deal are "advancing as expected."
The company noted that a "prominent" lobby firm in Washington was supporting its dialogue with key stakeholders in the U.S. government, but did not specifically name the organization.
Critical mineral companies, including those involved with rare earths, have increased their lobbying efforts in Washington, in an attempt to reap the benefits from major investments the White House has promised to firms whose operations it deems are essential to national security, Reuters has reported.
Once the listing is completed, Tactical Resources said it expects to have "enhanced access" to capital markets and additional funds to bolster development at its flagship Peak Project mine near El Paso, Taxes.
The group said it has exclusive access to the site and has an option to acquire the project area in the future, adding it believes Peak Project "will enable it to become a significant rare earth elements producer in the United States."
The proposed combined business with Plum implies a pro forma enterprise value of $589 million, Tactical Resources said last year.
Several countries, including the U.S. and Australia, have sought to expand their production of rare earth materials to counter China’s dominance in the sector. China is currently overseeing almost 70% of the world’s output of rare earth elements, according to Tactical Resources.
These elements, which are crucial to a host of technologies ranging from semiconductors and electric vehicles to advanced robotics, have become a focal point of recent trade tensions between the U.S. and China.
On Thursday, Beijing hit back on calls from Washington to roll back its expanded controls on exports of these minerals, saying they are consistent with longstanding measures in other countries. The U.S., for its part, has described China’s latest restrictions as a "global supply-chain power grab."
U.S. President Donald Trump, who has threatened to slap triple-digit tariffs on Beijing in response to rare earth minerals export controls, and Chinese counterpart Xi Jinping are due to meet in South Korea later this month.
China’s tighter controls rare earth element (REE) exports, plus a more interventionist U.S. policy environment "tends to raise the option value of near-term, domestic, lower-capex feedstock-to-leach pathways and recycling/tailings-based REE projects -- particularly those aligned with defense-relevant magnet materials and capable of accelerating time-to-first-production," Tactical Resources said.