Lindian Resources has signed a maiden sale and purchase contract with global commodity trader Gerald Metals, part of the Gerald Group, for monazite rare earths concentrate from its Kangankunde project in Malawi.
Management says the deal provides for the supply and sale of 45,000 tonnes of monazite concentrate from the stage-one development of the Kangankunde operation during a five-year period.
The contract period can be reduced at Lindian’s election through increased production and delivery of the monazite concentrate. The company also has the right to enter into additional sales contracts.
According to the agreement, monthly and annual quantities will represent a minimum of 40 per cent of the monazite concentrate produced at the operation, with delivered amounts of no less than 750 tonnes of concentrate per month and no less than 9000 tonnes per year.
The contract states that the monazite concentrate will have a total rare earth oxides (TREO) content of more than 55 per cent, a neodymium-praseodymium (NdPr) minimum content of 18 per cent and an average NdPr content of 20 per cent.
Management believes revenue from the deal will effectively underwrite its first-stage project development cashflows as the company moves to construction and producer status.
In addition to the sale and purchase agreement, Gerald Metals may elect a US$10 million (AU$15.5 million) run-of-mine finance facility to be made available to Lindian. However, the terms of the potential facility are to be negotiated separately, subject to a financing agreement and proposed security package over Kangankunde’s mined ore stockpiles.
Lindian is also in early discussions with the United States Government for support for its large-scale, second-stage development of Kangankunde. Management says Gerald’s expertise in financing critical minerals is a key factor in the deal, in addition to being able to leverage relationships with multilateral agencies to support the development of Kangankunde.
Gerald Group is the world's biggest independent, employee-owned metal trading house and a major global commodity trading company.
Lindian Resources executive chairman Asimwe Kabunga said: “This maiden Sale and Purchase Contract for monazite concentrate provides one of the key enablers to advance Lindian to producer status by end-2024. This is a major achievement for a project that was effectively acquired in August 2022, just 13 months ago.”
The company last month unveiled its maiden mineral resource estimate (MRE) for Kangankunde, coming in at 261 million tonnes at an impressive grade of 2.19 per cent TREO.
Management says its 5.7 million tonnes of contained rare earths included in the MRE is of excellent grade, with a high percentage of critical metal elements and non-radioactive mineralisation and positions the project among the world’s biggest rare earths deposits. Notably, management believes its contained figure has 1.2 million tonnes of the key high-value critical mineral elements of neodymium and praseodymium.
Lindian says with a mining licence in place at Kangankunde, in addition to environment and social impact assessment licences granted, the company will be able to quickly move to project development following the execution of the latest contract with Gerald Metals.
And that may just force the market to sit up and take a little more notice.
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By Michael Philipps
