Peak Rare Earths advances its Ngualla project with a proposed A$158 million acquisition by Shenghe Resources, alongside a successful A$7.5 million capital raise and rising rare earth prices.
- Binding scheme implementation deed with Shenghe Resources valuing Peak at ~A$158 million
- Completion of a heavily oversubscribed A$7.5 million entitlement offer
- Sale of non-core Teesside site for £3.5 million to support project funding
- Commencement of land compensation payments in Tanzania
- Rare earth prices, especially NdPr Oxide, continue to appreciate amid strong EV sales growth
Strategic Acquisition Proposal
Peak Rare Earths Limited (ASX – PEK) has taken a significant step forward in its development of the Ngualla Rare Earth Project with the announcement of a binding scheme implementation deed (SID) with Shenghe Resources. The proposed acquisition values Peak at approximately A$158 million, representing a striking 199% premium to the company’s share price prior to the announcement. This deal, now structured through Shenghe’s Singapore subsidiary, Shenghe Singapore, marks a shift from an earlier, more complex transaction and aims to provide greater certainty amid geopolitical and regulatory challenges.
Capital Raise and Asset Rationalisation
During the quarter, Peak successfully completed a pro-rata non-renounceable entitlement offer, raising around A$7.5 million. The offer was substantially oversubscribed, reflecting strong shareholder confidence. Concurrently, Peak sold its non-core Teesside site in the UK for £3.5 million (~A$7.3 million), a strategic move aligning with its focus on developing the Ngualla Project as a standalone high-grade concentrate operation. Proceeds from these transactions are earmarked to fund land compensation, working capital, and transaction costs related to the acquisition.
Progress on the Ground and Community Engagement
Operationally, Peak has commenced land compensation payments to Project Affected Persons in Tanzania, a critical milestone for advancing the Ngualla Project. The payments follow government approval and reflect Peak’s commitment to responsible development. The project also received a high-profile visit from Tanzania’s Minister for Minerals, Hon. Anthony Mavunde, who praised the company’s progress and community initiatives, including the handover of a new police station and educational facilities to the local community.
Market Tailwinds and Pricing Dynamics
The rare earth market continues to strengthen, buoyed by rapid growth in electric vehicle (EV) adoption globally. Peak highlighted data showing global EV sales reaching 2.5 million units in April 2025, with China’s penetration of battery electric and plug-in hybrid vehicles climbing to 43.7%. This surge drives incremental demand for critical rare earth elements like neodymium-praseodymium (NdPr) oxide, a key input for EV motors. Correspondingly, NdPr oxide prices appreciated during the quarter, rising from US$61.0/kg to US$61.88/kg, and further climbing to US$68.64/kg by late July.
Looking Ahead
The proposed scheme remains subject to shareholder approval, regulatory consents from Tanzanian authorities, and Australian court approvals, with a timetable targeting completion by October 2025. The Peak Independent Board unanimously recommends shareholders vote in favor, citing the scheme’s superior value and reduced risk profile compared to previous transaction structures. With a solid cash position of over A$10 million and strong market fundamentals, Peak Rare Earths is poised to navigate the next phase of its rare earth project development amid a tightening global supply landscape.
Bottom Line?
As Peak Rare Earths moves closer to a transformative acquisition and project advancement, investors will watch closely how regulatory approvals and rare earth market dynamics unfold.
Questions in the middle?
- Will Peak shareholders approve the scheme given the significant premium and associated risks?
- How will geopolitical tensions influence the finalisation and execution of the Shenghe acquisition?
- What impact will rising rare earth prices have on Peak’s project financing and development timeline?