Pensana Plc (LON:PRE) has provided the following update on the debt finance component of the Longonjo rare earth project:
- Leading Pan-African bank Absa Bank Limited, acting through its Corporate and Investment Banking Division, has conditionally approved a credit term sheet for its 50% participation in an approximately US$160 million syndicated loan facility, subject to the conclusion of definitive loan documentation and the fulfilment of conditions precedent contained therein as well as obtaining political and commercial risk insurance cover from a reputable political risk insurer on Absa’s exposure under the Facility.
- The Facility will provide senior funding for the Phase 1 development of the Company’s Longonjo rare earth mine in Angola through its 84% owned subsidiary Ozango Minerais SA.
- The debt financing will look to deliver approximately 60%of all project funding for Longonjo with the balance (40%) funded through equity provided at the Ozango level.
Pensana Chairman, Paul Atherley, commented:
“We are grateful for the work undertaken by the Absa team in providing the Longonjo project with a conditional commitment to its share of the US$160 million debt funding requirement for the Longonjo project.
This is an important step towards finalising funding for a project which will have a major positive impact on the community, creating over 600 high value jobs of which over 50% are expected to be allocated to young people as well as supporting local businesses and farmers.
Once in full production the project will create an estimated 2,400 direct and indirect jobs and will produce around 5% of the world’s magnet metal rare earths used for wind turbines and electric vehicles”
The agreed term sheet follows the successful completion of a detailed technical, marketing, environmental and fiscal due diligence process and conditional approval of the loan by Absa’s credit committee, with the legal due diligence process to be finalised.
