Peak to boost Ngualla stake

Rare earths miner Peak Resources plans to restructure its funding arrangements to increase its stake in the Ngualla joint venture, with a $7 million capital raising put forward to investors.

In a statement today, Peak said it would raise $1 million through the placement of about 20 million shares at 5 cents each, and up to $6 million through a 10-for-36 non-renounceable rights issue.

The price of the raising represents a 23 per cent discount to the company’s last closing price.

As part of the raising, Appian Natural Resources Fund, a co-investor in the Ngualla rare earths project (located in Tanzania) and a substantial shareholder in Peak, has agreed to provide a loan for any shortfall in the rights issue component of the raising, capped at $6 million.

If the raising is successful, Peak plans to increase its direct stake in the Ngualla joint venture to 75 per cent (up from 62.5 per cent), leaving Appian with a 20 per cent stake and global development institution IFC with a 5 per cent stake.

Peak managing director Darren Townsend said the company was pleased to welcome new overseas institutional investors to Peak, and thanked Appian for its ongoing support in Peak.

“Importantly, in a period of low rare earth pricing, this funding package sees the company fully financed through to the completion of the bankable feasibility study which we believe will position Ngualla as a world class magnet metal project,” Mr Townsend said.

A BFS on Ngualla is expected to be completed by early 2017.

Grange Capital Partners acted as lead manager to the placement.

Peak shares were 7.6 per cent higher to 7 cents each at the close of trade.