"Based on preliminary, historical resource estimates, the company believes the Bahia project has the potential to supply approximately 3,000-10,000 tonnes per year of monazite sand concentrate to the mill (depending on production rates), containing approximately 1,500-5,000 tonnes of total rare earth oxides per year, potentially for decades," the company said.

The deal is with private mineral rights holders in Brazil with the heavy mineral sand concessions totally 17.

The total consideration for the acquisition is US$27.5 million in cash.

The company will now go through a 90-day due diligence period.

Energy Fuels CEO Mark Chalmers said the acquisition forms part of the company's plan to become a major global rare earth element producer based in the US.

"The Bahia deposit is well-known throughout the HMS industry as having excellent potential to produce high-quality ilmenite, rutile, and zircon products, in addition to monazite," he said.

"Our clear current priorities are to continue to build our book of monazite feed to a world scale and to leverage our existing solvent extraction experience and infrastructure at the mill to produce both separated ‘light' and ‘heavy' rare earth oxides, and other products, by adding commercial separation capabilities to the mill," he said.

Energy Fuels share price was C$7.73 oh May 20, having risen 3% day on day. The company has a market capitalization of C$1.22 billion.