(Reuters) - Shares of Matamec Explorations MAT.V rose more than 15 percent on Monday, after the Canadian rare earth exploration company announced it had signed a preliminary deal with Toyota Tsusho Corp (8015.T), the trading arm of Toyota Motor Corp (7203.T).
Under the memorandum of understanding, Matamec and Toyota Tsusho will establish a joint venture to fast track the development of the Kipawa rare earth mining project in western Quebec.
Toyota Tsusho is looking to secure supply of valuable heavy rare earths used in the production of electric and hybrid vehicles.
The non-binding deal is dependant on the delivery and assessment of a preliminary study of the economics of the Kipawa project. If the deal goes through, Matamec will end up owning 51 percent of the project, while Toyota Tsusho will hold 49 percent.
Shares of Matamec rose 15.79 percent to 33 Canadian cents on Monday morning on the Toronto Stock Exchange.
Reporting by Julie Gordon; Editing by Peter Galloway