The Conversation (0)
Following the strategic partnership announced with Iluka Resources Ltd (ASX:ILU) (binding long term Offtake Agreement and debt funding) and successful institutional Placement for the target quantum, the Lindian Board has approved a Final Investment Decision ("FID") for main construction of Stage 1 of its world-class Kangankunde Rare Earths Project ("Kangankunde" or the "Project").
Highlights
Successful A$91.5 million two tranche Placement with strong demand from new Australian and offshore institutional investors, significantly in excess of funds sought Placement issue price of A$0.21 per new share, representing a 6.7% discount to the last closing price of A$0.225 on Friday, 15 August 2025. Premium to the volume weighted average trading price ("VWAP") achieved:
- 12.5% premium to the 5-day VWAP
- 43.2% premium to the 15-day VWAP
- 48.0% premium to the 20-day VWAP
Final Investment Decision ("FID") has been declared by the Lindian Board for the full development of Stage 1 of the Company's Kangankunde Rare Earths Mine in Malawi, with first production scheduled in Q4 CY2026
Firm commitments secured from Australian and offshore institutional investors for a Placement of approximately 435.7 million new fully paid ordinary shares ("New Shares") at an issue price of A$0.21 per New Share to raise approximately A$91.5 million (before costs).
Kangankunde is now fully funded to project completion and to first production Placement proceeds will also be applied to increase ownership of Kangankunde to 100%, complete engineering works for Stage 2 expansion along with a phased infrastructure rollout to support our Stage 2 expansion.
Petra Capital Pty Limited acted as Sole Lead Manager and Sole Bookrunner to the Placement.
The Placement of 435.7m New Shares comprises two tranches:
- Tranche 1: approximately 139.8m New Shares to be issued under the Placement using Listing Rule 7.1 capacity
- Tranche 2: approximately 295.9m New Shares subject to shareholder approval
Set out in link below* is the Placement timetable for Tranche 1 and Tranche 2.
Kangankunde: Stage 1 - FID & Fully Funded
As highlighted in the Feasibility Study, Kangankunde is a long life (45 years Life of Mine "LoM", based on Ore Reserves), high-grade rare earths project (2.9% Total Rare Earths Oxide "TREO" LoM, 3.1% TREO Years 1-5), which will produce a premium saleable Monazite Concentrate at 55% TREO grade with no deleterious elements and low levels of radionuclides (uranium and thorium). Stage 1 of Kangankunde will deliver a conventional open-pit mining operation and simple gravity and magnetic separation flowsheet, with all permits in place for development and mining operations.
Completion of Stage 1 will enable the plant to produce approximately 15,300 tonnes per annum of premium Monazite Concentrate. The Project economics are robust with a pre-tax NPV of A$1.18bn and internal rate of return (IRR) of 99%. The Stage 1 capital cost of ~US$40 million is now fully funded. With key site works already commenced, first production is targeted and on track for Q4 CY2026.
Kangankunde: Stage 2 Expansion - Approved Mining Licence Expansion
Stage 2 at Kangankunde is focused on a significant expansion of production capacity, leveraging the Project's large-scale mineral resource of 261Mt and the recent Mining Licence expansion approval.
The potential increase to production is based on the expanded Mining Licence area from 900 hectare ("ha") to 2,500ha (increase of 1,600ha). The Feasibility Study identified the potential to expand production capacity to 50,000 tonnes per annum ("tpa"). Lindian will commission an expansion feasibility study to expand the production capacity above this target. Engineering works are underway to design an optimised modular production plan that will build upon the Stage 1 process plant and infrastructure.
Importantly, the additional funds raised through the Placement will be directed towards Stage 2 expansion works, accelerating the expansion pathway.
The Stage 2 expansion is further supported by Lindian's strategic partnership with Iluka. Iluka is granted a Right of First Refusal ("ROFR") for Stage 2 production expansion at Kangankunde for up to a further 375,000 tonnes (25,000tpa for 15 years), subject to Iluka providing a 50% debt funding offer for the expansion capital cost and agreeing to Lindian's revised commercial terms (such as pricing mechanisms), which provides a strong foundation for additional growth. Iluka's product entitlement is up to 31,000tpa of Monazite Concentrate (dry).
Iluka Strategic Partnership - Stage 1 and Stage 2 Expansion
The strategic partnership with Iluka Resources provides both near-term funding support and long-term offtake, and contracted revenue certainty with a floor price set above Kangakunde's cost of production. Under the binding agreements, Iluka has provided a US$20 million five-year construction loan to assist with Stage 1 development and entered into a 15-year offtake agreement for 90,000 tonnes (6,000tpa) of Monazite Concentrate feed for its Eneabba refinery in Western Australia, with an ROFR to extend for a further 15 years.
Drawdown under the term loan facility is subject to completion by Iluka of its confirmatory due diligence, full form documentation, the project being fully funded, expenditure of required equity, and customary conditions precedent for a facility of this kind.
Eneabba, which is partly funded by the Australian Government, will be Australia's first fully integrated rare earths refinery and will produce separated light and heavy rare earth oxides. The refinery is currently under construction; scheduled for commissioning in 2027 in line with commercial operations at Kangankunde. Lindian will also benefit from any realised price pass-through from any Government price support or floor price achieved at Eneabba.
Lindian Executive Chairman, Robert Martin commented:
"We are delighted with the support we have received from new domestic and international institutional investors for this Placement, with demand significantly in excess of funds sought. The demand at a large premium to our VWAP's and the quality of the investor base attracted, confirms to the market, the support and understanding that our Tier 1 Kangankunde Rare Earths Project now has in the global investment community.
To be able to declare the Final Investment Decision sets Lindian on the pathway to being the world's next rare earths producer, a truly remarkable position for your Company to be in. We now have a very clear, fully funded and unencumbered pathway to first production.
The Company now fully funded, will accelerate our already well-advanced pathways to production including finalising major contracts, placing orders for long lead time items, awarding services contracts and fast-tracking our larger Stage 2 studies.
The Company would like to thank Frank Barila and the team at Petra Capital for the amazing effort they have put in bringing this transformational placement together. We would also like to thank our Australian legal advisors, Hamilton Locke, for their ongoing assistance as we reshape Lindian into a global rare earths producer, for their guidance and support during our negotiations with Iluka and for their support through this capital raise."
*To view the Indicated Timetable, please visit:
https://abnnewswire.net/lnk/WYJWHK58
About Lindian Resources Limited:
Lindian Resources (ASX:LIN) is an Australian based company with world class rare earths and bauxite assets in Malawi and Guinea. Through the development of these assets, Lindian aims to become a globally significant critical minerals producer.
The Kangankunde Rare Earths Project in Malawi is the cornerstone of Lindian's asset portfolio. The Project has attracted strong interests globally given that Kangankunde is financially viable at both forecast prices and at the low current spot prices for Neodymium ("Nd") and Praseodymium ("Pr"). Lindian will produce a premium monazite Concentrate at 55% Total Rare Earth Oxides ("TREO") grade with no deleterious elements with operating costs in the lowest cost quartile globally, establishing as one of the largest, most promising underdeveloped rare earths deposits in the world.
The Kangankunde Project has access to good supporting infrastructure, strong community and government support and has all key licences and approvals in place to commence construction. Following the feasibility study, Lindian is now advancing project financing discussions with the aim to commence Stage 1 construction in 2025. In addition, Lindian also has bauxite assets in Guinea and Tanzania.
Source:
Lindian Resources Limited
Contact:
Robert Martin
Executive Chairman
robert.martin@lindianresources.com.au
Teck Lim
Chief Financial Officer
teck.lim@lindianresources.com.au
Hannah Murphy
Corporate Development
Investor Relations
hannah.murphy@lindianresources.com.au
