Peak Rare Earths and Shenghe Forge Partnership to Develop Tanzanian REE Project
Australia’s Peak Rare Earths has signed a non-binding term sheet with Chinese miner Shenghe Resources to support the development and funding of the Ngualla rare earth elements (REE) project in Tanzania.
The agreement outlines Shenghe’s plan to acquire a 50% stake in the entity that holds an effective 84% interest in the Ngualla project by subscribing for new shares worth AUD 96 million.
This valuation implies a post-transaction share price of AUD 0.36, which Peak notes is more than double its current share price on the ASX.
Upon completion, Peak will not need to provide any additional equity funding for the Ngualla project’s development. The gap between the project’s total development costs and Shenghe’s AUD 96 million investment will be covered by a Shenghe-arranged debt facility, expected to offer more favorable terms than typical international project financing.
Peak Executive Chairperson Russell Scrimshaw stated that the Ngualla project is poised to become the world’s next significant rare earth operation.
Shenghe Executive Chairperson Huang Ping echoed this sentiment, calling the project “the premier undeveloped rare earth project in the world.”
The Ngualla project boasts estimated ore reserves of 18.5 million tonnes with a grade of 4.8% total rare earth oxides (TREOs), amounting to 887,000 tonnes of contained TREOs.
Mineral resources are estimated at 214.4 million tonnes, grading at 2.15% TREOs, for a total of 4.61 million tonnes of TREOs.
The project is expected to have a mine life of approximately 20 years based solely on its ore reserves. It will process 800,000 tonnes per year of dry ore, producing an estimated 37,200 tonnes per year of concentrate through a concentration plant at the mine site.
