Matamec Explorations Inc., a junior mining rare earth exploration company, has entered into a sale and purchase agreement (SPA) and a joint venture agreement (JVA) with Toyotsu Rare Earth Canada, Inc. (TRECan) over the former's Kipawa heavy rare earths element (HREE) deposit in Québec.

Under the SPA, TRECan obtained from Matamec Explorations Inc. an undivided interest of 49 per cent in the Kipawa HREE Deposit for a total consideration not exceeding $16,000,816 CAD. The said amount will be used to fund the expenses related to the feasibility study on the deposit.

Under the JVA, a management committee will be created with representatives from both companies. Matamec Explorations Inc. will be operator of the joint venture so long as it holds more than 50 per cent of the interest.

The JVA and the joint venture between the parties will become effective concurrently with the transfer to TRECan and the payment to Matamec Explorations Inc. of the first 25 per cent undivided interest in the Kipawa HREE Deposit.

"The present agreement marks a major milestone for Matamec. It allows an independent feasibility study to be completed leading to a production decision by Q2 2013. TRECan is a reputable partner giving Matamec both the financial and technical support to allow it to catapult to the forefront in the race to production of HREEs outside of China," Andre Gauthier, president of Matamec Explorations Inc., said.