ENERGY MINERALS

Peak Rare Earths raises after being granted mining licence

ASX-listed Peak Rare Earths has tapped investors for additional funds for the development 84%-owned Ngualla project in Tanzania.

Haydn Black
Peak's Ngualla is close to development

Peak's Ngualla is close to development

Peak's largest shareholder, China's Shenghe Resources, together with several new institutional investors have agreed to pump $27.5 million in at 50c per share, a 25% discount, as the company readies itself for the start of construction in October.
 
Barrenjoey and Canaccord Genuity managed the placement.
 
If approved by shareholders, Shenghe will increase its stake in Peak to 19.9%.
 
Peak had most recently reported cash of $2.8 million at the end of March.
 
Peak chair Russell Scrimshaw said the placement, together with the recent signing of a critical framework agreement and issue of a special mining licence, positioned Peak to make a final investment decision in September and start delivering rare earths to the market in 2025.
 
The cash will support early works, front-end engineering and design contracts, and updated environment and social studies.
 
Peak completed a bankable feasibility study last October, electing to defer a rare earth refinery in the UK in favour of accelerating development of the Ngualla carbonate as a provider of a rare earth concentrate to third party processors. 
 
Shenghe has signed a non-binding agreement to take up to 100% of offtake over the first seven years.
 
The project, which Peak has worked on for almost 20 years, has a post-tax net present value of US$1.48 billion with an equity internal rate of return of 37.3% based on expected pricing for neodymium and praseodymium.
 
Ngualla has an upfront capital cost of $321 million, with an initial 24 years of mine life based on reserves of 18.5 million tonnes grading 4.8% total rare earth oxides and average production of 16,000t of concentrate grading 45% TREO, with NdPr about 22% of the total.
 
Resources of 214Mt at 2.15% TREO suggest future upside.
 
The BFS indicated annual earnings of A$711 million and an annual cashflow of $458 million.
 
Shares in the company dropped 12% to 55c. It has traded at 29-74c over the past year.

 

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.