Wyloo Consolidated Investments chief executive officer Luca Giacovazzi said: “We are excited to formally commence our partnership with Hastings and progress the development of this globally significant rare earth project. Yangibana is a high-quality rare earth deposit with an attractive basket composition.”
The joint venture’s key terms are consistent with an agreement revealed on May 16, and will see two representatives from each firm form a project management committee.
A Wyloo subsidiary has been appointed as the exclusive marketing manager for all products produced under the agreement, with two representatives from each firm to head up a marketing committee. The focus is to ensure a streamlined sales process of high-demand neodymium and praseodymium for electric vehicle magnets and wind turbines.
The completion of the agreement results in full and final settlement of the $123 million exchangeable notes held by Wyloo and follows the transfer of about 8.35 million shares in Neo Performance Materials from Hastings to Wyloo on February 20 as part of stage one of the transaction.
Hastings is to make a final $7.4 million payment to Wyloo within 45 days of commencement of the joint venture, representing the agreed value of the remaining 623,816 Neo shares as of May 14.
Assuming a remaining $316 million capital expenditure cost for the project and a 50 per cent to 60 per cent gearing structure, Hastings is no longer burdened by the prospect of huge debt or crushing equity raises to move into production status based on its 40 per cent stake.
By linking arms with a firm bearing financial muscle power, it can leverage Wyloo’s pro-rata commitment for 60 per cent funding for Yangibana.
Yangibana’s next steps are clear and precise. Activities underway or planned include mine scheduling, capex and opex reviews and finalising the project’s execution plan and budget ahead of a final investment decision for stage one development. The remaining engineering design work for the beneficiation plant and offtake and finance discussions for the remaining project funding debt are still to be completed.
Offtake talks with global players and debt financing discussions are accelerating, building on the project’s robust fundamentals of an initial 17-year mine life to produce 37,000 tonnes per annum of mixed rare earth carbonate.
Located near existing infrastructure, Yangibana benefits from low sovereign risk and Australia’s critical minerals push. Demand for rare earths is anticipated to springboard 7 per cent annually to 2030.
This deal is Hastings’ ticket to rare earths royalty, blending Wyloo’s financial muscle with a significantly de-risked financial structure.
For investors, Hastings retained stake and reduced capital requirements equals a potential high-voltage opportunity. With the project poised for production in the near-term in a geopolitically critical market, Yangibana’s rare earth riches beckon.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
