Technology Metals Australia Ltd (ASX:TMT) has potential financing support on the horizon for its Murchison Technology Metals Project (MTMP) in Western Australia in the form of a letter of interest (LoI) from Denmark’s export credit agency EKF.
The company is progressing the development of the MTMP in Western Australia to produce high-purity vanadium pentoxide (V2O5) and a high-value ilmenite by-product.
Positive engagement
TMT and EKF have had positive and strong engagement during the time TMT has been progressing with the development of the MTMP and the LoI from EKF marks a significant milestone in the progression of this relationship.
The EKF LoI contemplates financing support of around A$150 million subject to:
- sufficient Danish economic interest;
- acceptable credit risk in the opinion of EKF;
- compliance with the OECD Arrangement on Officially Supported Export Credits;
- completion of normal and customary project due diligence including on environmental and social matters; and
- satisfactory documentation and security package.
EKF supports Danish exporters such as Technology Metals’ key equipment supplier FLSmidth, having had extensive and positive experience with FLSmidth on projects worldwide for more than 90 years.
Technology Metals is progressing discussions with FLSmidth regarding the supply of various key equipment items, including the roasting kiln section, required for the development of the MTMP.
Financing support from EKF is backed by the Danish state and as such can be considered to carry a AAA rating.
EKF has been involved in the financing of a significant number of transactions and projects all over the world and has extensive experience in the field of export and project finance.
Positive and constructive relationship
TMT managing director Ian Prentice said: “Our engagement with EKF has been very positive and constructive over a number of years and we are very pleased to have progressed the relationship to receive this letter of interest for financing support for the MTMP.
“This is an exciting and significant milestone alongside our partnership with FLSmidth, which places TMT in a strong position to progress the development of the MTMP.
“The TMT team is undertaking considerable work in progressing the MTMP funding strategy, including engagement with a range of institutions and also importantly progressing implementation of the company’s holistic ESG action plan in collaboration with WSP Golder while maintaining a clear focus on the timely development of the MTMP and the supply of high purity vanadium pentoxide to play an important role in the global transition towards net-zero.”
EKF works alongside commercial banks arranging and structuring transactions and has a track record of cooperation with other export credit agencies and development finance institutions.
ESG approach
TMT’s ESG approach is an important factor in engagement with government funding agencies, commercial banks, strategic investors and institutional financiers.
The company is implementing a holistic ESG action plan to guide the development and long-term operation of the MTMP to ensure the sustained success of the project and the engagement with, and support of, all stakeholders.
This engagement includes working with the Traditional Owners on heritage and environmental matters and ensuring that the MTMP provides long-term benefits to the community through employment, contracting and training opportunities.
Progression of the environmental approvals process is a significant factor in the MTMP implementation phase, with the company maintaining its collaborative approach with the WA Environmental Protection Authority (EPA) as it prepares updates to its environmental review document consistent with its ESG philosophy.