Lindian Resources Secures $50M Funding for Kangankunde Rare Earths Project

Strategic Partnership with Gerald Group to Drive Project Development
Lindian Resources has announced a significant $50 million funding deal with Gerald Group, aimed at advancing the Kangankunde Rare Earths Project in Malawi. The non-binding agreement involves a combination of equity, convertible instruments, and prepayment loan facilities. This partnership is designed to support the development of the first phase of the project, with an estimated capital expenditure (capex) requirement of $40 million, as revealed in the June 2024 feasibility study (FS).

Funding Details and Project Phases
The funding package will enable Lindian Resources to cover both capital and operational expenditures, including establishing an initial stockpile of monazite concentrate. The first phase of the project, which will focus on producing premium monazite concentrate, is expected to generate significant revenue, with a forecasted annual EBITDA of $84 million. Additionally, Gerald Group will secure full offtake rights for the monazite concentrate produced in phase 1 and partial rights for the subsequent phase. The proposed deal also ensures that Gerald will have a voice in the decision-making process through the nomination of directors to Lindian Resources’ Malawi subsidiaries.

Financial Projections and Economic Impact
The Kangankunde Rare Earths Project, located 90 km north of Blantyre, is projected to have a post-tax net present value (NPV) of $555 million and an internal rate of return (IRR) of 80%. The first phase will focus on producing 15,300 tonnes per annum of monazite concentrate, which is critical in the production of rare earth elements used in high-tech industries. With a payback period of just two years, the project is expected to generate substantial returns, benefiting both Lindian and its partner Gerald Group.

Partnership Significance and Project Timeline
The deal with Gerald Group is seen as a key milestone in accelerating the development of the Kangankunde project. Lindian Resources CEO Alwyn Vorster emphasized the importance of this strategic partnership in scaling the company’s low-cost, high-purity iron and rare earth production. Construction for the first phase of the Kangankunde project is expected to begin in the first half of 2025, with the goal of meeting growing global demand for rare earth materials.