PERTH (miningweekly.com) – ASX-listed Peak Resources has struck a conditional agreement with Appian Pinnacle HoldCo that could result in the company gaining full ownership of the Ngualla rare earths project, in Tanzania.
Peak has inked a binding heads of agreement with Appian to roll up its ownership interest in the Mauritanian-registered company Peak African Minerals (PAM) into Peak, simplifying the ownership structure and streamlining government procedures.
The proposed simplification of PAN would also facilitate the introduction of additional institutional investors in Peak and possible development partners for the Ngualla project, Peak chairperson Peter Meurer said on Monday.
In exchange for its 20% ownership in PAM, Appian would receive more than 327.49-million shares in Peak, resulting in the company holding a 36.93% stake in Peak.
Appian will continue to have entitlement to Peak board nominees, as long as its shareholding is maintained above 10%.
Appian will continue to meet its 20% share of the PAM group costs until the transaction has been settled.
The completion of the roll-up is conditional on PAM’s other shareholder, the International Finance Corporation (IFC) entering into its own heads of agreement with Peak to roll-up its own 5% interest in PAM in exchange for an 8.07% interest in Peak.
“We expect to be able to finalise an agreement with IFC soon, which will enable us to present a clear path to development for development partners and institutional investors,” Meurer said.
“Appian and IFC demonstrated great foresight investing into the project at a time when the commodity markets were largely unaware of the burgeoning importance of rare earths. The importance of rare earths has recently been brought sharply into focus by the ongoing trade dispute between the US and China, and the underlying demand fundamentals supported by the e-revolution assure of great opportunities for Peak and the project.”
Ngualla is expected to deliver 32 700 t/y of mineral concentrate over its 26-year mine life.