Peak Resources

ASX-listed rare earths junior Peak Resources has executed a deal which will see it acquire 100% ownership in its Tanzania-based Ngualla project. Without this deal, the company risked reducing its ownership even further as it will have to offer up a 16% free carry stake to the government at some point in its future.

CEO Rocky Smith confirms that a Binding Heads of Agreement has now been executed with International Finance Corporation (IFC) (IFC BHoA).

Signing of the IFC BHoA and the previously executed Binding Heads of Agreement (Appian BHoA) with Appian Pinnacle HoldCo to roll up their ownership interest in Mauritian registered company, Peak African Minerals (PAM) into Peak, paves the way for Peak to move to 100% ownership of the Ngualla project.

Peak Resources has as yet made no mention of the legislation requirements pending by the Tanzania government – but the introduction of a 16% free carry is stipulated in the new Mining Act – the conditions of which have not been clarified by the government as yet.

Peak Resources’ Chairman, Peter Meurer comments:

“We thank IFC for their constructive and collaborative approach leading to the signing of this agreement in a timely manner.”

“We thank IFC for their support and input into the advancement of the project and we welcome their continued support as we take the next steps towards development of this globally significant project.”

The company believes the proposed simplification of the PAM ownership structure and streamlining of the governance procedures will ensure that the interests of all shareholders will be aligned towards the development of the project.

The proposed simplified structure is intended to facilitate the introduction of additional institutional investors in Peak Resources and development partners to the project.

This has already been demonstrated by the introduction of a number of new institutional investors who participated in the company’s $4.8 million capital raising completed on 8 August 2019.

Completion of the transaction is conditional upon the satisfaction of the following key outstanding conditions precedent:

  • Peak obtaining all necessary shareholder and regulatory approvals required by the Corporations Act, Listing Rules and other applicable laws in relation to the Transaction;
  • Receipt of an independent expert’s report prepared for the purpose of obtaining the approvals concluding that the transaction is either fair and reasonable or not fair but reasonable to the non-associated shareholders of Peak;
  • Eeach of the conditions to settlement being satisfied or waived; and
  • There being no Material Adverse Effect in relation to Peak and its subsidiaries.