Greenland Mines Ltd (NASDAQ: GRML) announced it has entered into a definitive agreement to acquire Neo North Star Resources, Inc., owner of the Sarfartoq Rare Earths Project in southwest Greenland, for $35 million in cash and stock.

The transaction includes $20 million in cash and $15 million in newly issued Greenland Mines common stock. Neo Performance Materials (TSX: NEO) will become a strategic shareholder and retain offtake rights for up to 60% of future Sarfartoq production.

The Sarfartoq project contains a historic NI 43-101 Mineral Resource Estimate of 5.88 million tonnes of indicated resources grading 1.77% total rare earth oxides and 2.46 million tonnes of inferred resources grading 1.59% total rare earth oxides. The ST1 zone hosts approximately 27 million kg of neodymium oxide and 8 million kg of praseodymium oxide.

Neodymium and praseodymium comprise 25-40% of total rare earth oxides at the deposit, with the nearby ST40 zone reportedly containing one of the highest known neodymium-to-total rare earth oxide ratios in the industry at 45%.

The project is located in the Qeqqata region, approximately 60 km from Kangerlussuaq. It sits within a 13 km-diameter carbonatite complex with a 32 km strike length, though only a small fraction has been explored to date.

Closing of the acquisition requires approval from the Government of Greenland under the Greenland Mineral Activities Act for the indirect transfer of mineral rights licenses, along with other regulatory and third-party consents.

After closing, Greenland Mines plans to advance an updated technical and economic work program, including discussions on updating the 2011 preliminary economic assessment to incorporate current neodymium and praseodymium pricing, which the company states is approximately twice the assumptions used in the original study.

The acquisition will give Greenland Mines two Greenland development assets: the rare earths-focused Sarfartoq project and the Skaergaard precious metals project in southeast Greenland.