Peak’s world-class Ngualla Rare Earth project to pump $320 million into the Tanzanian economy

Australian Stock Exchange (ASX) listed  Peak Rare Earths Limited yesterday signed a binding Framework Agreement with the Government of Tanzania with respect to the Ngualla Rare Earth Project.

It further elevates Ngualla’s position as the premier undeveloped rare earth project in the world with high-grade Ore Reserves, low levels of radionuclides, a fully piloted flowsheet, and a completed Updated Bankable Feasibility Study.

The Framework Agreement sets out the basis of the Government of Tanzania’s agreement for the licencing, development, economic benefit sharing and the formation of a joint venture between Peak and the Government of Tanzania with respect to the development and operation of the Ngualla Project

The signing of the Framework Agreement follows the recent joint establishment of two companies by Peak and the Government that include Mamba Minerals Corporation Limited (“MML”) – that will own and operate the Ngualla Project; and Mamba Refinery Corporation Limited (“MRL”) – that will own and operate any future Tanzanian refining and downstream operations.

Both entities are owned 84% by Peak (via a 100% owned UK subsidiary, Ngualla Group UK Limited) and 16% by the Government of Tanzania (via the Treasury Registrar).

Peak and the Government of Tanzania have also agreed a series of other documents contemplated by the Framework Agreement relating to the formation and management of MML and MRL, including Memorandum and Articles of Association and a Shareholders Agreement.

The Cabinet of the Tanzania approved a Special Mining Licence (“SML”) application for the Ngualla Project in July 2021. Under the Framework Agreement, the Ngualla Project SML will include the amalgamation of the original SML application area, a Prospecting Licence (PL 10897/2016) and a recently expired Prospecting Licence (PL 9157/2013).  It is expected that the SML will be formally granted to MML shortly.

Speaking during the signing ceremony, Bardin Davis, Chief Executive Officer of Peak said, “We are delighted to be partnering with the Government of Tanzania in the development of the world-class Ngualla Rare Earth Project. Development of the Ngualla Project will deliver direct foreign investment of more than $320 million into the Tanzanian economy, generate hundreds of direct and thousands of indirect jobs for Tanzanians and position Tanzania as one of the major rare earth producers outside of China. It represents an opportunity to deliver multi-generational opportunities to the people of Tanzania “The Framework Agreement lays the foundations for robust returns for Peak shareholders, long-term and sustainable benefits for the community and a substantial source of future revenue for the Government of Tanzania,”

Dr Dotto Biteko the Minister for Minerals said, “The signing of the Ngualla Rare Earth Framework Agreement marks a major milestone for the Government of Tanzania and Peak Rare Earths,”

Russell Scrimshaw, Executive Chair of Peak said the project will position Tanzania as a major player in the international rare earths sector and will play an important role in supporting global decarbonisation initiatives.

“It will also support the delivery of employment, investment in social and regional infrastructure as well as a substantial source of revenue for the government in the form of dividends, royalties and taxes.” Scrimshaw said.

The Ngualla Project is one of the largest, highest grade and lowest cost Neodymium and Praseodymium (“NdPr”) rare earth projects in the world. It is located approximately 147km from the city of Mbeya in southern Tanzania and on the edge of the East African Rift Valley. It has large and high-grade Ore Reserves (18.5Mt grading at 4.8% Rare Earth Oxide (“REO”) for 887kt REO) and Mineral Resources (214.4Mt grading 2.15% REO for 4.61Mt REO)1.

As part of a staged development strategy, the Ngualla Project will initially be developed to produce a high-grade concentrate for export to third-party refiners.

In support of this approach, Peak has recently signed a non-binding strategic and concentrate offtake Memorandum of Understanding (“MOU”) with its largest shareholder, Shenghe Resources (Singapore) Pte Ltd (“Shenghe”)2.

A Bankable Feasibility Study Update (“BFS Update”) covering the development of the Ngualla Project as a standalone concentrate project was completed in October 2022. It supports a technically robust project with highly attractive economics and shareholder returns.

The Ngualla Project entails the development of a mine, mill, beneficiation facilities, concentrator, community projects and associated infrastructure.

It will create around 600 direct jobs and 3,000 indirect jobs during construction as well as around 220 direct and 1,000 indirect jobs during operations.

The Ngualla Project will deliver the Government of Tanzania a substantial source of revenue in the form of corporate taxes, indirect taxes, royalties, and dividends arising from its 16% non-dilutable free carried interest.