Iluka backs Lindian rare earths play in Malawi | Australian Markets

An African rare earths developer has pulled off the deal of the week to turn out to be the speak of the city, as wheelers and sellers descended on the gold mecca of Kalgoorlie for the annual Diggers and Dealers convention.

Emerging junior Lindian Resources has unveiled a multi-pronged, multi-million-dollar main offtake settlement, cornerstone funding and strategic partnership with world important minerals heavyweight Iluka Resources to push its world-class Kangankunde project in Malawi in direction of first manufacturing.

The seismic deal for the company cements Kangankunde as one of the pre-eminent rare earths developments on the planet, as Iluka scrambles to lock in its strategic rare earths provide for Australia’s future.

The news has set the market abuzz with Lindian’s share price hovering by as a lot as 60 per cent in early trading this morning, as traders piled into the stock on the back of the US$20 million (A$32 million) partnership.

Under the settlement, Iluka will entrance a US$20 million construction loan, accompanied by a 15-year offtake deal for 90,000 tonnes of Kangankunde’s premium monazite focus, weighing in at a stellar 55 per cent complete rare earth oxides (TREO).

The focus is sort of 20 per cent high-value neodymium and praseodymium (NdPr) rare earths, that are important for electric vehicle motors and renewable vitality applied sciences.

Lindian is now firmly plugged into the Western world’s push for a secure, non-Chinese rare earths provide chain.

The project’s hefty 261-million-tonne useful resource grading some 2.19 per cent TREO with an ore reserve at a increased 2.9 per cent, had the company firmly on the radar of world gamers resembling Iluka. The Australian producer has now jumped to lock in the rising Lindian, because the federal authorities strikes to duplicate the United States and set a ground price for native rare earths manufacturing.

Kangankunde is effectively on its strategy to stage 1 manufacturing, in which the project is set to churn out 15,300t of focus yearly, together with 1600t of NdPr, over an uncapped 45-year mine life. And that’s simply the beginning.

With a pre-production capex of simply US$40 million (A$64 million) and working prices of US$2.92 per kilogram of rare earth oxides, the project sits in the bottom value quartile globally.

Even at right now’s depressed rare earths costs, Lindian’s feasibility research tasks a pre-tax internet current worth of US$794 million (A$1.225 billion) and an inner price of return of 99 per cent to present a one-year payback.

The Iluka partnership appears to be like like a masterstroke for each events. The offtake locks in 6000t every year of feed for Iluka’s Eneabba rare earths refinery in Western Australia – Australia’s first absolutely built-in, government-backed rare earths facility, slated for commissioning in 2027. The pricing might be tied to Eneabba’s realised NdPr oxide costs, offering a ground price prone to dwarf Kangankunde’s already profitable manufacturing value.

If Iluka secures authorities price assist, Lindian will get a slice of that upside too. It additionally has a proper of first refusal clause in the deal for an extra 9600t of NdPr after the initial offtake and up to 25,000t every year for a part two growth at Kangankunde, offered Iluka funds 50 per cent of the growth capex.

The funding and offtake agreements characterize a main de-risking milestone for Stage 1 of our Kangankunde rare earths project, offering elevated confidence for all our stakeholders by displaying a clear pathway to manufacturing. The bigger Stage 2 manufacturing growth has additionally been considerably de-risked, with Iluka having a ROFR for up to an further 25,000 tonnes every year of product if it makes an offer to fund 50% of the capital value.

Lindian says a stage 2 growth would probably triple output down the road, utilizing the identical low-risk gravity-magnetic flowsheet that makes the mining so easy. The project impressively requires no flotation, no reagents, no waste dams and has a negligible stripping ratio of 0.2.

Iluka’s US$20 million secured time period loan comes with a five-year tenor at a 9.7 per cent average curiosity margin, with no financial covenants or penalties for early compensation.

Lindian may also raise an extra US$7 million working capital facility, giving it the pliability to completely fund Kangankunde’s Stage 1 construct. First manufacturing is focused for 2026.

The deal doesn’t simply de-risk Stage 1 – it lays a rock-solid basis for growth. Iluka’s phrases for Stage 2 funding signal confidence in Kangankunde’s scalability.

With a 45-year mine life, a flowsheet that’s so simple as it will get and a partnership to provide Australia’s important minerals strategy for the foreseeable future, Lindian is no longer simply a junior with potential – it’s rising a severe future cornerstone in the worldwide rare earths race.

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