Billionaire Andrew Forrest’s Wyloo has entered into exclusive negotiations with ASX-listed Hastings Technology Metals to establish an unincorporated joint venture (JV) for the Yangibana rare earths and niobium project.

In addition, Wyloo has acquired a 19.99% equity stake in TSX-listed Neo Performance Materials, becoming its largest shareholder.

Under the terms of the agreement, Wyloo has acquired 8 350 311 shares in Neo from Hastings for A$79.8-million. The transaction value aligns with the cancellation of exchangeable notes of an equivalent amount.

Wyloo will hold a 60% participating interest in the venture and act as the manager and operator, while Hastings' wholly owned subsidiary, Yangibana Jubilee, will hold a 40% interest. Wyloo will have the option to increase its stake to 70%.

The venture will encompass both Stage 1 of the Yangibana project and the Stage 2 hydrometallurgical plant.

The remaining exchangeable notes will be cancelled upon the venture’s formation, with Hastings settling the value of its remaining 623 816 shares, or 1.49%, in Neo through a cash payment to Wyloo.

Hastings confirmed the execution of an exclusive non-binding term sheet for the JV with Wyloo, describing it as a strategic partnership that will bring technical expertise and financial backing to the Yangibana project.

Hastings executive chairperson Charles Lew said the agreement followed ongoing discussions with Wyloo regarding the exchangeable notes and the best path forward for the project's development.

"We are pleased to have Wyloo as a JV partner at the Yangibana rare earths and niobium project. The JV arrangement is the result of what has been ongoing, positive discussions between Hastings and Wyloo regarding the exchangeable Notes and a mutually beneficial way to proceed with the development of the Yangibana project, within which significant value will be realised," Lew said.

"Partnering with Wyloo brings incremental technical expertise and strong financial backing to our project, which is already one-third completed. The early termination of the Wyloo exchangeable notes and bringing in a strong partner at this juncture, where A$226-million has already been spent by Hastings as part of the Phase 1 and Phase 2 project development, will bring greater certainty to final funding and on more competitive terms."

Lew also noted that Hastings will continue pursuing opportunities to develop downstream hydrometallurgical and magnet processing plants in Saudi Arabia, which he said would complement the JV with Wyloo.

Wyloo CEO Luca Giacovazzi expressed enthusiasm for the new partnership, following Wyloo’s initial investment in Hastings in 2022. He described Yangibana as one of the most advanced rare earths projects in Australia and said it would become a globally significant source of neodymium and praseodymium, a key component in the manufacture of permanent magnets. He also highlighted the project’s production of niobium and other by-products critical to the energy transition.

Giacovazzi also welcomed the acquisition of a 19.99% equity stake in Neo, calling it a leading global rare earths processing and advanced permanent magnets producer. He said Wyloo looked forward to working closely with both Hastings and Neo across the mine-to-magnet supply chain as the company expanded its critical minerals portfolio.

The completion of the JV agreement and other binding documentation is expected by the end of March 2025, pending regulatory approvals.