Graphite company Hexagon Resources (ASX: HXG) is broadening its scope, after signing a binding agreement with US-based Innovation Metals Corp (IMC).

Under the terms of the deal, Hexagon will get the option to purchase a 49 per cent interest in IMC’s RapidSX separation technology used in rare earths processing.

It marks a strategic shift for the company to diversify its business model and the market applauded, sending shares in the company up more than 15 per cent.

Global competition heats up

To complete the deal Hexagon’s fully-owned US subsidiary will form a joint venture with IMC to create a new company, American Innovation Metals Inc.

Hexagon will pay $2m up front to help fund the construction of a commercial demonstration plant, along with a deferred consideration of $4m which will be paid out of future cash flows from the plant.

The company said the RapidSX technology will assist producers in global markets across the US, Europe, Japan and Korea to compete with Chinese extraction facilities.

In turn, that will mitigate the risks involved with the “current extreme concentration of rare-earth supply and separation capability in China”, Hexagon said.

Prior to commercialisation, the US Department of Defense contributed $US1.8m in R&D funding towards the development of RapidX.

Hexagon reckons the commercial demonstration plant will take about six months to build, and commence operations by the September quarter of next year.

Once up and running, it’s forecast to have production capacity of 60,000 to 80,000kg of rare-earth oxides per year. Hexagon will seek shareholder approval for the deal at this year’s AGM, scheduled for November 22.

In other ASX tech metals news today

Alpha HPA (ASX: A4N) provided an update on its pilot production plant for HPA processing. The initial assays went well and the company now plans to accelerate production and send samples to potential offtake partners soon. Shares in A4N were down 2.78 per cent at 17.5 cents.

Australian Vanadium (ASX: AVL) is back drilling again to “further define the high-grade zone” at its vanadium magnetite project in WA’s Murchison province. The company says it plans to carry out a number of resource development drilling programs over the next 12-18 months.

And Ardiden (ASX: ADV) has signed a non-binding Memorandum of Understanding (MOU) with nearby lithium developer, Rock Tech Lithium Inc. The two parties are going to take a look at whether they will join forces to develop a lithium project in northwest Ontario, Canada. Ardiden cited potential synergies from combining operations, as both deposits are located near to mining and transport infrastructure.