PERTH (miningweekly.com) – Rare earths hopeful Peak Resources on Tuesday announced a restructured funding package to underpin the completion of a bankable feasibility study (BFS) for its Ngualla project, in Tanzania.
The new arrangement would see Peak undertake a placement and rights issue to raise some A$7-million. Shareholder Appian had agreed to provide a loan of up to A$6-million should there be a shortfall in the rights issue.
Peak would issue some 20-million fully paid ordinary shares at a price of 5c each, to raise an initial A$1-million. The placement, which represented a discount price of 23% to Peak’s last trading price, would be completed under the company’s existing capacity.
In addition, shareholders would be entitled to participate in a 10-for-30 nonrenounceable pro-rata offer to raise a further A$6-million.
Once the placement and rights issue has been completed, and following the receipt of existing Stage 2 funding from Appian, worth some A$3.1-million, Peak would be fully funded to complete a BFS at Ngualla, targeted for early 2017.
Peak MD Darren Townsend said on Tuesday that with the new funding arrangements in place, the Stage 3 Appian funding of a further A$4.4-million would not be required, and as a result, Peak would increase its final direct ownership in the Ngualla project from the originally envisaged 62.5% to 75%, while Appian and financier International Finance Corporation would hold 20% and 5% respectively.
Previous studies on the Ngualla project had indicated that it would require a capital investment of some $330-million to produce 10 000 t/y of rare earths over a mine life of around 50 years.