Peak Rare Earths Limited (ASX: PEK) has announced the approval of its binding offtake agreement with Shenghe Resources (Singapore) Pte. Ltd. by the Tanzanian Mining Commission. This follows the approval of the offtake agreement by Peak shareholders at a general meeting on 17 June 2024. All conditions precedent within the offtake agreement have now been either satisfied or waived.
Bardin David, CEO, commented, “This marks yet another major de-risking milestone and further strengthens Ngualla’s position as one of the world’s most attractive and advanced rare earth projects. Our offtake agreement with Shenghe delivers a higher level of payability and is supporting our rapidly advancing debt financing process.”
Shenghe Singapore is a wholly owned subsidiary of global rare earths company, Shenghe Resources Holding Co., Ltd., which is listed on the Shanghai Stock Exchange and has a market capitalization of approximately US$2.2B.
Shenghe Singapore holds an approximate 19.89% interest in Peak and appointed a non-executive director to the company’s board in December 2022. Shenghe is the largest importer of rare earth concentrate into China and its operations span rare earth mining, beneficiation, refining, and alloy and metals production.
Also, Shenghe aholds an approximate 7.75% interest in MP Materials Corp (NYSE:MP) which operates the Mountain Pass Rare Earths Project in California. MP Materials has a market capitalization of approximately US$2.2B and Shenghe has been a supportive major shareholder through long-term offtake, technical and funding cooperation.
To support an equity funding solution for the Ngualla Rare Earth Project, Peak and Shenghe are continuing to progress discussions around an effective project level investment by Shenghe. This could entail Shenghe subscribing for an interest of up to 50% in Ngualla Group UK Limited, being the holding company through which Peak holds its interest in Mamba Minerals Corporation Limited and the Ngualla Project.
Further, a key objective for Peak in any proposed transaction is to structure an effective investment in the Ngualla Project at a materially higher valuation than implied by Peak’s current share price.
To find out more, please visit www.peakrareearths.com
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