PERTH (miningweekly.com) – ASX-listed Peak Resources on Friday announced plans to raise A$30-million through a share placement to progress the development of its Ngualla rare earths project and the Teesside refinery.
Peak will place an initial 226.8-million shares, at a price of 9c each, under the company’s existing placement capacity, raising an initial A$20.4-million.
A further 106.4-million shares will be placed subject to shareholder approval, raising an additional A$9.6-million.
A share purchase plan (SPP) giving existing shareholders the opportunity to subscribe for up to A$30 000 worth of additional shares in Peak, at a similar price, is expected to raise a further A$4-million.
Peak said on Friday that proceeds would be used in the development of the Ngualla project and the Teesside refinery, and to repay the ANRF royalty facility.
The Royalty Agreement, providing a 2% gross revenue royalty over the life of the Ngualla project, was granted to ANRF as part of the financing package for the bankable feasibility study (BFS) for the Ngualla project in 2014. In 2015, ANRF exercised its option and extended a $5.1-million financing package to Peak as part of the funding for the BFS.
“We are delighted to be welcoming new Australian and international institutional investors on to our register. The placement will support Peak as it progresses offtake, funding and development milestones for the Ngualla project and the Teesside refinery,” said Peak MD Bardin Davis.
“The repayment of the ANRF Royalty Facility will clear the way for Peak to meet its commitment to transfer the special mining licence into a newly registered company that will be jointly owned by Peak (84%) and the Tanzanian government (16%).
“The termination of the life-of-mine royalty further de-risks the financing of the Ngualla project and provides shareholders with increased exposure to earnings from the project and the potential upside in rare earth prices. A combination of lower project outflows and the removal of security arrangements will also better position the project to secure attractive long-term project and export financing support,” said Davis.
He noted that the cost of repaying the financing facility is materially below the anticipated value of the royalty stream over the life of the Ngualla project and reflects the significant enhancement in the value of the project since July 2015.
A 2017 BFS estimated that the $165-million Teesside refinery would produce around 2 810 t/y of high purity neodymium and praseodymium (NdPr) oxide, around 625 t/y of combined mid and heavy rare earth carbonate, some 7 995 t/y of lanthanum rare earth carbonate, and 3 475 t/y of cerium rare earth carbonate sourced from the Ngualla project, in Tanzania.