Canaccord sees A$570 mln spending for Peak Rare Earths' Tanzania project

Peak Rare Earths

09/08/2023 23:02

** Analysts at Canaccord Genuity expect gross capital
expenditure for Peak Rare Earths'  PEK.AX  Ngualla project in
Tanzania to be A$570 million 
    ** PEK signed a seven-year binding offtake with Chinese rare
earth producer Shenghe Resources  600392.SS  for supply of 100%
of its high-grade rare earth mineral concentrate from Ngualla
    ** PEK also flagged delay in project schedule for Ngualla
with final investment decision (FID) now targeted for May 2024
    ** Due to the FID delay, brokerage now expects the Ngualla
project to begin construction in September quarter of 2024 and
eyes first production in March quarter, 2026
    ** Canaccord maintains price target at A$0.90/share as it
feels the delay in project schedule is offset by the binding
agreement
    ** While the agreement flags potential for a stake buy in
the project by Shenghe, we think PEK will be willing to maintain
majority ownership - Canaccord 
    

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))