Peak Rare Earths Secures $8.5M Boost as Ngualla Project Advances Amid Strategic Talks

Capital Raising and Strategic Partnership

During the December 2024 quarter, Peak Rare Earths Limited (ASX: PEK) successfully completed an approximately $8.5 million capital raising. This was structured through multiple tranches, including placements and a notably oversubscribed Shareholder Purchase Plan (SPP), which attracted $2.8 million in applications against a $2 million target. The capital raise notably included a $1.7 million contribution from Shenghe Resources, Peak's largest shareholder, increasing Shenghe's stake to nearly 20%.

This infusion of capital is pivotal as Peak advances its strategic partnership with Shenghe Resources. The two companies have been negotiating an integrated investment, development, and funding agreement for the Ngualla Rare Earth Project in Tanzania. Although the transaction timeline has slipped, recent productive discussions at Shenghe’s Chengdu headquarters and the completion of Shenghe’s due diligence signal progress toward finalising the deal.

Operational Progress and Community Engagement

Peak has also been advancing early mining and enabling works at Ngualla, including upgrading access tracks, establishing equipment laydown areas, and preparing the initial pit stage. These preparatory activities are critical steps ahead of a Final Investment Decision, which will be informed by the ongoing negotiations and project development milestones.

In parallel, Peak has completed a Resettlement Action Plan and land compensation schedule in compliance with Tanzanian law and IFC standards, addressing the needs of 193 Project Affected Persons. This plan includes upfront and ongoing payments to the Ngwala Village, reflecting Peak’s commitment to responsible community engagement.

Community support initiatives have continued apace, with construction underway on two classrooms for the new Ngwala High School and the community’s first police station, alongside electrical upgrades to the local maternity clinic. These efforts underscore Peak’s integrated approach to social responsibility alongside project development.

Asset Rationalisation and Market Context

Peak is also progressing the sale of its non-core 49-acre Teesside site in the UK. By subdividing the site into three plots, the company aims to maximise value from the sale, with discussions ongoing for each parcel. Proceeds from this sale are expected to complement the recent capital raising and support ongoing project and corporate funding needs.

Market dynamics remain favourable for Peak’s rare earths focus. Despite a slight moderation in NdPr oxide prices from seasonal highs, demand drivers remain robust. Electric vehicle sales grew by 10% year-on-year to December 2024, with NdFeB consumption in automotive applications rising approximately 28%. Government investments in EV infrastructure across Europe and the US further bolster demand prospects for critical minerals like those produced at Ngualla.

Financial Position and Outlook

As of 31 December 2024, Peak held $4.8 million in cash, with exploration and development expenditure of $1.6 million during the quarter. Subsequent to quarter-end, the company raised an additional $3.7 million through placements and the SPP settlement, enhancing its liquidity position. Operating cash outflows and investment activities continue as Peak prepares for the next phase of project development.

Looking ahead, the market awaits the finalisation of the Shenghe transaction and the subsequent Final Investment Decision, which will be critical milestones for Peak’s trajectory. The company’s integrated approach, balancing capital raising, operational progress, community engagement, and asset optimisation, positions it well to capitalise on the growing global demand for rare earth elements essential to low-carbon technologies.