London-listed rare earths project developer Pensana, through its 84%-owned subsidiary Ozango Minerais, which owns 100% of the Longonjo project, in Angola,  has concluded a nonbinding term sheet with the Longonjo lender consortium for a project finance debt facility of up to $156-million..

The facility is aimed at providing limited recourse senior secured project finance to fund the Longonjo mine, flotation circuit and refinery.

The maximum tenor of the facility is to cover the construction period and ramp-up to full production, plus four years 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.

The company is in advanced discussions with the Angola Sovereign Wealth Fund (FSDEA) and a member of the lender consortium to finalise the $80-million equity component of the overall financing package.

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, including 10% contingency, of $217-million, making it one of the lowest among its peers according to Pensana.

Meanwhile, Pensana is in advanced discussions with several parties for the offtake of the “highly marketable”, radionuclide-free mixed rare earth carbonate (MREC) and has recently received product approval from one of its potential customers.

The company expects to be in a position to sign up to 100% of the production of the high value, clean MREC from the Longonjo processing facility.

The FSDEA has provided a $15-million bridging loan facility towards the $80-million equity investment, which continues to be available to facilitate early-stage project development and the route to main finance.

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

“This is a major step for the company 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,” says Pensana chairperson Paul Atherley.