KALGOORLIE (miningweekly.com) – ASX-listed Peak Rare Earths has inked a binding offtake agreement for all of the rare earth concentrate from its Ngualla project, in Tanzania, for an initial seven-year term.
The company on Wednesday said subject to subsequent binding offtake agreements, Singapore’s Shenghe Resources would also take a minimum of 50% of any intermediate rare earths product of final separated rare earths oxide.
The offtake agreement would be done on a take-or-pay basis, with pricing to be market-based.
In addition to the offtake agreement, Peak has also signed a non-binding memorandum of understanding (MoU) with Shenghe setting out the basis of a cooperation on assessing an integrated engineering, procurement and construction (EPC) and project funding solution for the Ngualla project.
“We are delighted to be extending our strategic cooperation with Shenge. The combination of a binding offtake agreement and a non-binding EPC and funding MoU differentiates Peak from its peers and supports a pathway to a successful project funding solution for the development of the Ngualla rare earths project,” said Peak executive chairperson Dr Russell Scrimshaw.
An 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.
Peak on Wednesday said the given the BFS was based on an engineering, procurement, construction and management (EPCM) execution model, the company would now prioritise an EPC execution model as part of a dual-track EPC and EPCM process.
A decision on the preferred execution model will be made before the end of the year.
A final investment decision on Ngualla is expected by the end of May next year, and the completion of construction and development is targeted by early 2026.