Hastings Technology Metals (ASX:HAS) has completed the first stage of the Yangibana Project financing process following the release of its staged development Feasibility Study, including first stage financiers’ investment and credit committee approvals.
This has culminated in Hastings receiving non-binding indicative financing proposals from multiple parties, including global mining funds, senior debt and fixed income investors (debt capital markets), to fund Yangibana with a target gearing ratio of 60% of the total funding package.
Hastings notes this is in addition to the previously announced financing support from commercial banks and government agencies.
The receipt of the financing proposals follows completion of lenders due diligence reports, including an independent technical expert report from Behre Dolbear Australia, which confirmed that the Yangibana’s revised capital and operating cost estimates and project delivery structure and schedule are reasonable and appropriate for a project of this nature.
Hastings has received various strategic partner and joint venture proposals from global mining funds which would reduce funding requirements
Additionally, Hastings has received various strategic partner and joint venture proposals from global mining funds which would reduce funding requirements, as well as enable it to leverage synergies, share risks, and access additional resources and expertise of a partner.
With the receipt of multiple financing proposals including loans, bonds, and joint venture proposals, Hastings is now in the process of negotiations to secure the most optimal financing package and syndicate that enhances long term value creation for shareholders.
Hastings is working with its financial advisors and consultants, to shortlist preferred financiers/syndicated lender group to conduct final due diligence and site visits, with final submissions due shortly thereafter.
During the September quarter, Hastings completed early infrastructure works at the Yangibana Project, including the Kurrbili Accommodation Village, Yangibana Airstrip, access roads, production borefields, water pipelines and clearing and grubbing of the entire plant site.
The company says an At-the-Market facility with AIP represents a strategic equity financing option for up to $50 million, offering Hastings the flexibility to raise capital incrementally over a 4-year period at an issue price referable to prevailing market prices, subject to a floor price that is set by Hastings.
Hastings retains full control over all major aspects of the placement process, having sole discretion as to whether to use the facility, the number of shares to be issued, and the minimum issue price of any issued shares.
The final issue price will be calculated as the greater of a floor price set by Hastings in the drawdown notice and a volume weighted average price over a period of Hastings’ choosing (at the sole discretion of Hastings) less a discount of 5%.
As collateral for the ATM facility, Hastings will issue 6.5 million shares to AIP from its LR 7.1 capacity, leaving a balance of 12.9 million capacity. Any placements under the facility in excess of Hastings’ LR 7.1 capacity will require shareholder approval.
The facility can be terminated by Hastings at any time without penalty.
Hastings’ flagship Yangibana Rare Earths Project located in the Gascoyne and Pilbara regions of Western
Australia, contains one of the most highly valued NdPr deposits in the world with NdPr to Total Rare
Earth Oxide ratio of up to 52% in some areas of the orebody.
Write to Adam Orlando at Mining.com.au