Lindian Resources is one step closer to securing the Kangankunde rare earths project in Malawi after making its first tranche payment to acquire current site owner Rift Valley Resource Developments.
Whilst the deal is subject to shareholder approval, the US$2.5 million payment is the first of four totalling US$30m, with the remaining US$27.5 million payable in three tranches within 48 months from the start of this month.
Kangankunde has been hailed as one of the world’s largest rare earths operations outside of China and hosts an outdated resource of 2.53 million tonnes grading 4.24 per cent rare earths oxide and containing 107,000 tonnes of rare earths oxide when using a cut-off grade of 3.5 per cent.
Lindian Resources Chairman, Asimwe Kabunga said: “With the formal completion of the tranche 1 payment, Lindian has demonstrated its ability to execute on a successful acquisition through long-term negotiations that balance the objectives and requirements of the vendors, project investors, regulators, policy makers and community representatives.”
The company says the Kangankunde deposit is a carbonatite-hosted system with mineralisation exposed at the surface and open at depth.
The ratio of neodymium and praseodymium in the total concentrate produced from the project is about 19 per cent with a mining licence already granted for the site.
The company says neodymium and praseodymium have become increasingly valuable since the project’s economics were last independently evaluated more than 10 years ago.
Earlier this month Lindian appointed commodities specialist Alistair Stephens as its new Chief Executive Officer, with comprehensive list of incentive-based goals, including declaring a JORC-compliant mineral resource for Kangankunde by the end of next year including 50 per cent of the estimate being indicated.
Stephens has also been given the task of releasing the results of a definitive feasibility study and a JORC-compliant ore reserve by the end of 2024 in addition to completing the project finance to start production at the project by the end of 2025.
The US Geological Survey shows China’s 2021 production of rare earths was 60 per cent of the global total, down from 80 per cent in 2017 and more than 96 per cent in 2009.
Rare earths are a group of 17 elements with unique catalytic, metallurgical, nuclear, electrical, magnetic and luminescent properties positioning them as highly valued and integral components in many of rapidly emerging technologies.
The elements are used in super magnets, electronic and computing equipment, lasers, batteries and catalytic converters of combustion engine vehicles.
Lindian has previously said that providing the deal gets the go-ahead from shareholders, the company plans to hit the ground running and “unlock Kangankunde’s value as quickly as possible”.
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