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Queensland Pacific Metals higher on supply and funding deals with German companies for TECH Project

Published Apr 04, 2023 14:37 Updated Apr 04, 2023 15:00
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© Reuters. Queensland Pacific Metals higher on supply and funding deals with German companies for TECH Project
 
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Queensland Pacific Metals Ltd (ASX:QPM) has signed a collaboration agreement with leading German companies Plinke, Andritz Separation and Siemens for the supply of equipment for the TECH Project.

In addition, the company has received financing support from two German financial institutions, Euler Hermes and KfW IPEX-Bank, worth A$500 million and A$357 million respectively.

This takes the company’s total indicative and conditional debt financing to in excess of A$1.4 billion.

Shares higher

Investors have welcomed these agreements on the path to development and operations at the project with shares 28.57% higher to A$0.135 on volume of almost 47 million 90 minutes before market close.

Looking ahead, these agreements will advance the TECH Project, ensuring the quickest pathway to production.

“Commercially proven equipment”

QPM director and CEO Dr Stephen Grocott said: “We have long identified that our German partners would be well positioned to supply commercially proven equipment required for the TECH Project.

“We have been actively engaged with Plinke, Andritz and Siemens throughout our feasibility work.

“Formalisation of these relationships through the collaboration agreement is a clear demonstration of each companies’ intentions and support for the TECH Project.

“This validates QPM’s strategy of sole-source partnering with leading equipment and technology suppliers.”

Supply agreement

As part of its past feasibility and current engineering work for the TECH Project, QPM has worked closely with each of the German suppliers to ensure their equipment will meet the requirements of the TECH Project.

As part of the collaboration agreement, QPM and the German suppliers will:

  • • collaborate to advance the TECH Project for the mutual benefit of all parties;
  • • collaborate to ensure that proposed equipment to be supplied will be designed and constructed to meet the requirements of the TECH Project;
  • • work towards providing performance guarantees for their equipment; and
  • • identify the quickest pathway through to construction and commercial production.

Furthermore, subject to completion of current optimisation test-work, engineering and commercial negotiation:

  • • the German suppliers will provide construction and commissioning assistance;
  • • the German suppliers will organise visits to plants in which their equipment is in operation; and
  • • QPM will not undertake a competitive tender on this equipment.

QPM and the German suppliers are completing design work and negotiating commercial terms, an important milestone which will be required as part of RPM Global’s due diligence as Independent Technical Expert for potential financiers.

Financing support

Regarding the financing support, Germany’s Export Credit Agency (ECA) Euler Hermes has provided a letter of interest to provide a tied loan guarantee that would be for an amount of about A$500 million, linked to the value of equipment to be provided by the German suppliers.

Meanwhile, KfW IPEX-Bank has confirmed its in-principle interest to provide up to US$250 million (~A$357 million) in debt financing split between the Euler Hermes guaranteed debt and non-ECA guaranteed debt.

“Furthermore, the conditional support received from Euler Hermes and KfW IPEX represents another milestone to our debt financing process,” Grocott said.

“We are delighted they have the potential to provide loans and loan guarantees to support the financing of the German supply contracts.”

Read more on Proactive Investors AU

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Queensland Pacific Metals higher on supply and funding deals with German companies for TECH Project
 

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