ASX-listed Peak Rare Earths on Tuesday announced a capital raising to support its momentum at the Ngualla project, in Tanzania, as it advances towards a final investment decision (FID).

Peak has received commitments to complete a two-tranche institutional placement for the issue of about 60-million new fully paid ordinary shares to raise A$6-million at an offer price of A$0.10 a share.

Peak’s largest shareholder, Shenghe Resources, has committed to top up its shareholding to 19.9% through the placement.

“This capital raising will support a continuation of Peak’s strong momentum as we progress our planned investment, funding and development transaction with Shenghe and the Ngualla project towards an FID,” said executive chairperson Russell Scrimshaw.

In July, Peak Rare Earths signed a nonbinding term sheet with Chinese miner Shenghe to support the development and funding of the Ngualla project. The term sheet contemplates Shenghe acquiring 50% in the entity that holds an effective 84% of the Ngualla project by subscribing for new shares worth A$96-million.

The project has estimated ore reserves of 18.5-million tonnes grading 4.8% total rare earth oxides (TREOs) for contained TREOs of 887 000 t. Mineral resources are estimated at 214.4-million grading 2.15% TREOs for 4.61-million tonnes TREOs.

The project has a mine life of about 20 years, based on only ore reserves. Run-of-mine throughput is estimated at 800 000 t/y dry ore.  Rare-earth ore mined from the Ngualla deposit will be processed through a concentration plant at the mine site. Production is an estimated 37 200 t/y of concentrate.