Lynas Shares Slide on A$968 Million Meteoric Resources Deal

Lynas Rare Earths (ASX) shares fell sharply on Thursday after the Australian miner agreed to acquire Brazilian rare-earth developer Meteoric Resources in an all-share transaction valued at A$968 million ($672 million).

Lynas shares dropped 7.1% to A$12.85, their lowest level since January 5, significantly underperforming the S&P/ASX 200, which declined 1.7%.

Under the binding agreement, Lynas will acquire 100% of Meteoric Resources at a fixed exchange ratio of 0.0207 Lynas shares for each Meteoric share. The deal carries an implied equity value of about A$968 million based on Lynas’ 60-day volume-weighted average share price.

Using Lynas’ latest closing price of A$13.83, however, the transaction values Meteoric at approximately A$876 million ($608 million). Meteoric shareholders are expected to own around 5.9% of the enlarged Lynas on a fully diluted basis after completion.

Meteoric’s board unanimously supports the acquisition, provided an independent expert concludes that the transaction is in shareholders’ best interests and no superior offer emerges.

The deal gives Lynas control of the Caldeira Rare Earth Project in Minas Gerais, Brazil. Lynas described Caldeira as the largest known ionic-clay rare-earth oxide resource outside China containing both light and heavy rare earth elements.

On a pro forma arithmetic basis, Caldeira would boost Lynas’ Measured and Indicated total rare-earth oxide resources by approximately 79% and reported Ore Reserves by about 26%. Meteoric’s reported resources include an estimated 802,000 tonnes of NdPr oxides and 41,000 tonnes of DyTb oxides.

Lynas said Caldeira’s output could be integrated into its downstream processing facilities in Malaysia, while the company is also evaluating potential downstream processing operations in Brazil.

Developing Caldeira is expected to require more than $500 million, with its feasibility study estimating initial capital expenditure at roughly $498 million. Lynas said the all-share acquisition preserves its balance sheet and liquidity for the project and other expansion plans.

Lynas will also provide Meteoric with up to A$110 million in interim funding. A shareholder meeting is expected in January 2027, with completion targeted for March 2027, subject to approvals.