Lindian Resources Ltd (ASX:LIN, OTC:LINIF) has joined forces with global metals powerhouse Gerald Metals SARL to fast-track its Kangankunde Rare Earths Project in Malawi to producer status by the end of next year.
This partnership is two-fold involving the sale of 45,000 tonnes of monazite concentrate from Kangankunde’s Stage 1 development to the trading company headquartered in London and a finance facility of up to US$10 million to the rare earth explorer.
The terms of the financing facility, including a pledge over Kangankunde’s mined ore stockpiles, are being negotiated separately between the two parties.
“Major achievement”
Billed as a major achievement for a project that was only acquired in August last year, Lindian executive chairman Asimwe Kabunga said: “I am delighted that the globally recognised metals trading group, Gerald Metals, is partnering with Lindian to facilitate the accelerated development of the world-class Kangankunde Rare Earths Project.
“We have been working with Gerald for an extended period on the terms of this sale and purchase contract and the financing facility.
“They have made multiple visits to site to undertake due diligence on the project and our staged development strategy.
“As such, we have established a great working relationship over this time and built confidence in them as a trusted partner.
“This maiden sale and purchase contract for monazite concentrate provides one of the key enablers to advance Lindian to producer status by end-2024.
Rallying support
Lindian is currently engaged in talks with the US Government regarding support for the expansive Stage 2 development of Kangankunde.
The company intends to leverage Gerald's expertise in financing the critical minerals sector and its relationships with multilateral agencies to propel Kangankunde's development forward.
“Pleased” to be part of project
“Kangankunde is truly one of the most exciting REE projects to be explored in recent memory and represents a key mineral asset for development in Malawi,” Gerald Group executive chairman and chief executive officer Craig Dean said.
“We have been following Lindian’s ongoing drilling campaign closely.
“I am very pleased to now be part of the development of Kangankunde and look forward to working closely with Lindian’s team to bring multilateral investment to the table.”
Contract key terms
The supply and sale of the monazite concentrate is for a period of 60 months but can be reduced at Lindian’s discretion through increased production and delivery of the product.
Subject to agreement between the parties, the offtake agreement can be extended a further two years in 12-month increments.
The contract covers monthly and annual quantities representing a minimum of 40% of the monazite concentrate produced by the project, with delivered quantities of:
- not less than 750 tonnes of concentrate per month; and
- not less than 9,000 tonnes of concentrate per year.
The first concentrate product, with a total rare earth oxide (TREO) content of above 55% and a neodymium and praseodymium (NdPr) minimum content of 18% and average content of 20%, is expected to be delivered by December 31, 2024.
Beefing up coffers
“The Kangankunde Rare Earths Project continues to deliver excellent results, including the globally strategic maiden mineral resource estimate reported last month,” Lindian chief executive officer Alastair Stephens added.
“With a mining licence and environment and social impact assessment licences granted, the company is able to quickly move to project development following the execution of this sale and purchase contract.
“These are exciting times for Lindian and we look forward to making further announcements as project development works ramp up.”
Top trading company
Gerald Metals is part of the Gerald Group, the world's largest independent, employee-owned metal trading house, and one of the world's leading global commodity trading companies.
Founded in the United States in 1962, it has trading operation hubs in Stamford, USA, Morges in Switzerland and Shanghai in China.
The group's global clientele and network of suppliers benefit from Gerald's tailored service model, encompassing all facets of the commodity value chain, including sourcing, marketing, logistics, storage, risk management, hedging, and structured finance solutions.