Globe Metals & Mining advances Kanyika Niobium Project with optimised capital strategy
Melbourne, Victoria
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May 29, 2024 03:50 PM Eastern Daylight Time
Globe Metals & Mining Ltd (ASX: GBE) CEO Paul Smith sits down with Proactive’s Jonathan Jackson to discuss the significant advancement in the Kanyika Niobium Project's capital cost and funding strategy. The project, situated in central Malawi and backed by a large-scale mining licence, has undergone an optimisation study highlighting key financial metrics and an enhanced development approach. Project execution is set to start by late 2024, with construction slated for early 2025. The initiative aims to produce a pyrochlore mineral concentrate with niobium and tantalum for advanced processing. The optimisation study, completed on February 5, revealed a pre-tax NPV of US$1.004 billion and an IRR of 47.08%. The unit cost of niobium pentoxide has decreased by 15% to US$18.90 per kilogram, raising the gross profit margin to 71%. The project is expected to operate for 27 years, with a two-phase development strategy reducing initial capital expenditure from US$70 million to US$46 million, thereby lowering project risk. The total capital funding requirement for Phase 1 is US$46 million, including a 25% contingency. Globe Metals & Mining has established a funding strategy to support the project, minimising shareholder dilution. This includes US$8 million from strategic equity funders, US$15 million in project debt, US$9 million via convertible instruments, and US$14 million from offtake pre-financing. Smith expressed optimism about the project's reception by the Government of Malawi, shareholders and funding institutions. Phase 1 development is mostly on schedule, with minor delays due to the refinery relocation to Malawi. The environmental and social impact assessment (ESIA) and associated incentives are nearing finalisation. Metallurgical test work for the Chlorination Refinery is progressing as planned, with pilot-scale refinery operations to produce marketing samples for offtake agreement discussions. Subsequent updates to the feasibility study will incorporate the construction of the chlorination refinery in Malawi.
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Proactive Investors
Proactive Australia Pty Ltd
+61 431 597 771
