Peak Rare Earths (ASX: PEK) has announced the signing of a non-binding indicative term sheet for a $176.6 million loan to finance part of its Ngulla rare earth project in Tanzania. This development was disclosed in a filing with the Australian Securities Exchange on Tuesday.
The financing will be provided by a consortium of lenders, including the Industrial Development Corporation of South Africa, the Development Bank of Southern Africa, CRDB Bank PLC Tanzania, NMB Bank Tanzania, and an East African commercial bank. The consortium is prepared to proceed with due diligence and a formal approval process, according to the filing.
The loan, which features a term of up to nine years, includes a cost overrun facility and incorporates market-standard debt covenants. This financial support is expected to significantly advance the development of the Ngulla project, which aims to contribute to the global supply of rare earth elements.
Peak Rare Earths’ management has expressed optimism about the potential of the Ngulla project, highlighting its strategic importance in the rare earth market. The project’s progression is anticipated to enhance Tanzania’s position in the global mining sector and provide economic benefits to the region.
The formal approval process and subsequent due diligence will determine the finalisation of the financing agreement, paving the way for further development of the Ngulla rare earth project.
