Photo by: Bloomberg
PERTH (miningweekly.com) – Rare earths developer Peak Rare Earths will raise A$27.5-million in a two-tranche institutional placement to advance the Ngualla project, in Tanzania, towards a final investment decision by the end of September.
The company on Monday said it had received firm commitments from institutional investors for the placement, under which some 55-million new shares would be offered at a price of 50c each.
The first tranche of the placement will consist of some 28.6-million shares, raising A$14.3-million under Peak’s existing placement capacity, while the second tranche of 26.4-million shares, to raise a further A$13.2-million, will be subject to shareholder approval.
The offer price represented a 20% discount to Peak’s last closing price on April 26, and a 25.3% discount to the company’s five-day volume weighted average share price.
Peak’s largest shareholder, Shenghe Resources, has committed to top-up its shareholding to 19.9% through the placement, subject to shareholder approval.
“Following the recent execution of a framework agreement and grant of a special mining license for the Ngualla project, Peak can now shift its focus towards making a final investment decision by the end of September 2023,” said executive chairperson Russel Scrimshaw.
“The placement strengthens Peak’s balance sheet and ensures that it is well-capitalised to commence early works, front-end engineering and design and finalise binding offtake arrangements and project financing discussions, which are progressing well. The placement has been well supported by Peak’s existing shareholders and will further introduce a range of new, high-quality institutional investors to the register.
“The support shown by institutions in this placement is testament to the significant work undertaken by the company to further de-risk development and is further validation of the world-class nature of the Ngualla project, which is one of the highest grade and most advanced undeveloped rare earth projects globally,” said Scrimshaw.
A recently updated bankable feasibility study (BFS) estimated that the project would require a capital investment of $321-million and would support the production of 16 200 t/y of concentrates.
The updated BFS estimated a mine-life of 24 years, and annual operating costs at $93-million a year, with the project expected to generate annual average revenues of $538-million a year and operating casfhlows of $276-million a year.