Mining firm Lindian Resources says it has secured a $50 million (K87.5 billion) funding agreement and take-off package from the United States-based commodity trader, Gerald Metals Group for its Kangankunde Rare Earth Project in Balaka District.
In a statement announcing the deal on Monday, the Australian Stock Exchange-listed miner said Gerald Metal Group’s injection will fund stage one development of Kangankunde project, with $40 million (about K70 billion) capital expenditure.
The remainder will cover the costs of creating initial run-of-mine stockpiles.
The statement further says the funding includes a combination of equity and convertible instruments as well as various prepayment type loan facilities which will be partially repaid through the supply of monazite concentrate to be produced from the project.
Reads the statement posted on the company’s website www.lindianresources.com.au: “It is contemplated that Gerald would be granted full off-take rights for monazite concentrate from phase one of the project, as well as partial off-take rights over production from phase two.
“Upon the first tranche of funding becoming effective, it is envisaged that Gerald will have the right to nominate directors to the boards of Lindian’s Malawi subsidiaries and on the board of Lindian.”
Lindian Resources Limited chief executive officer Alwyn Vorster is quoted in the statement as having said it is pleasing that a globally recognised metals trading group, is working with it towards accelerating the development of the world class Kangankunde Rare Earths Project.
“The proposed funding facility and offtake agreement for monazite concentrate will be key enablers to advance Kangankunde’s construction activities in the first half of 2025,” Vorster said.
In an interview on Tuesday, geologist Ignatius Kamwanje said the injection is a timely boost for the medium-scale miner to meet its 2025 phase one construction deadline.
He said: “Kangankunde is classified as a medium scale mining project and to secure such funding from an off-taker is something that boosts confidence to investors.
“This will surely fast track construction activities and benefit the communities surrounding the mine in Balaka in terms of job and business opportunities.”
The project has an initial ore reserve of 23.7 million tonnes with an impressive average grade of 2.9 percent total rare earth oxides (Treo), underpinning a mine life of 45 years.
It is slated to generate about 15 300 metric tonnes (MT) per year of clean, high-grade concentrate running at about 55 percent Treo to produce about 8 400MT of rare earth oxides and 1640MT of the valuable magnet rare earths, neodymium and praseodymium.
According to a recent feasibility study released in July of this year, the project has a net present value of $555 million (K972 billion) at an eight percent discount rate.
Output is also estimated to increase from the initial 15 000MT to 50 000MT annually, the report said.
