Credit agency Export Development Canada (EDC) has indicated in a conditional letter of interest that it will provide a direct lending debt funding package of up to A$400-million to ASX-listed Australian Strategic Minerals (ASM).

The funds will be aimed at constructing and advancing to production the rare earths and critical minerals Dubbo project, in Australia.

The deposit is prospective for heavy rare earths, zirconium, nobium and hafnium.

ASM has been garnering support from export credit agencies and other parties across different jurisdictions for financing, with funders in North America showing the most interest.

The company attributes the interest to the strong policy alignment between Australia and North American jurisdictions, particularly to establish a critical minerals supply chain outside of China.

ASM previously received letters of support from Export Finance Australia and Export-Import Bank of the US, for A$200-million and A$923-million of debt funding, respectively.

EDC’s indicative financial support increases sourcing flexibility and demonstrates the growing confidence in a shared financing approach for the Dubbo project. The financing remains conditional on all requisite EDC internal approvals and typical finance conditions.

The letter of intent is valid until April 2025.

Notably, EDC’s financing may be supported by potential equipment and services supply from Canadian companies for the execution phase of the project.

“Our focus has been on building strategic partnerships in North America that support the development of our mine-to-metals strategy. We see the momentum in financial support as recognition of the strength of the Dubbo project and its significance as a reliable and responsible source of critical minerals,” ASM MD and CEO Rowena Smith says.

ASM continues to progress discussions with more financial institutions to participate in debt funding of the Dubbo project.

The Dubbo project is located near Toongi, in Australia, which has connections to the major cities of Sydney and Newcastle through road and rail.

All permits are in place for construction of the Dubbo project to proceed. Bechtel Mining and Metals has been appointed to conduct front-end engineering design services for the project.

ASM intends to produce metal oxides in the form of chemicals, powders and metals from the Dubbo site, and, in future, refine critical metals at a proposed plant in South Korea.