Pensana, through its 84% owned subsidiary Ozango Minerais SA, which owns 100% of the Longonjo project, has concluded a non-binding term sheet with the Longonjo lender consortium for a project finance debt facility.

The facility amount is up to US$156 million to provide limited recourse senior secured project finance to fund the Longonjo mine, flotation circuit and refinery and is to cover the construction and ramp up to full production to an overall maximum of seven years.

The facility is conditional on obtaining guarantees from the relevant export credit agency for which discussions are well advanced.

Pensana is in advanced discussions with the Angola Sovereign Wealth Fund (FSDEA) and a member of the lender consortium to finalise the US$80 million equity component of the overall financing package which will be provided at the subsidiary level.

Conclusion of the Term Sheet follows the successful completion of a modular redesign of the fully permitted Longonjo mine and processing facility, with a total capital expenditure of US$217 million, making it one of the lowest amongst its peers.

Pensana expects to be in a position to sign up to 100% offtake agreements for the highly marketable, radionuclide-free mixed rare earth carbonate (MREC) and has recently received product approval from one of its potential customers.

Paul Atherley, Pensana chairman commented:

“We are grateful to FSDEA for its ongoing support and to the lender consortium for their work in concluding the US$156 million debt term sheet to finance the Longonjo rare earths mine and processing facility.

“This is a major step for Pensana in its plans to bring into production one of the world’s largest undeveloped rare earth projects.

“It is also an important step for the establishment of an African-based, independent, supply chain of the metals crucial to the energy transition, which captures significant value within Angola and creates several hundred long-term high value jobs within the local community.”