Shenghe Resources is set to become a major shareholder in Tanzania-focused Peak Rare Earths after buying a 19.9 per cent stake in the company for well above market price.
Shenghe Resources is set to become a major shareholder in Tanzania-focused Peak Rare Earths after buying a 19.9 per cent stake in the company for well above market price.
The acquisition lifted Peak’s share price by about 13 per cent after the developer informed the market of the news this morning.
Shenghe Resources Holdings, which touts a $US4.9 billion ($A6.8 billion) market cap, will acquire a 19.9 per cent interest in the company for 99 cents per Peak Rare Earths share, representing a 24.5 per cent premium on Peak’s last closing price.
Shenghe subsidiary Shenghe Resources (Singapore) acquired the holding from private company Appian Pinnacle Holdco, whose nominee non-executive director Rebecca Morgan will step down from the board as a result.
The deal adds to the Shanghai Stock Exchange-listed company’s existing interests in other international rare earths companies including MP Materials Corp, Vietnam Rare Earth Company and Greenland Minerals.
Broadly, Peak has viewed the Shenghe’s backing as a ringing endorsement.
“Shenghe is a leading participant in the global rare earth sector and we view its investment as a strong endorsement of the world-class nature of Peak’s integrated Ngualla-Teesside rare earth project,” Peak chair Tony Pearson said.
“Peak remains committed to its integrated Ngualla-Teesside strategy and we look forward to continuing our existing regulatory, technical and commercial discussions in order to progress our project to a final investment decision.”
A notice of initial substantial holding for Shenghe is set to be issued to the market in due course.
According to Peak, the asset contains one of the largest, highest-grade and lowest-cost neodymium praseodymium rare earth deposits in the world.
It has plans for a mine, mill, concentrator, community projects and associated infrastructure at the Ngualla site, which sits on the edge of the Rift Valley in East Africa.
All up, Peak has the project construction priced at $US200 million ($A280 million) but is yet to make a final investment decision on the project.
The company changed its name from Peak Resources to Peak Rare Earths on November 29 2021.
It is one of a number of Perth-based miners with projects in Tanzania, including OreCorp, Black Rock Mining and Strandline Resources.
Black Rock today appointed seasoned mining executive Paul Sims as its chief financial officer.
Peak Rare Earths shares closed the trading session up 6.92 per cent to trade at 85 cents.
