Perth-based explorer Lindian Resources has locked in A$91.5-million from institutional investors and approved a final investment decision (FID) to build the first stage of its flagship Kangankunde rare earths mine, in Malawi.

The two-tranche equity raising, priced at 21c a share, was strongly supported by new domestic and international investors. The issue price represented a 6.7% discount to Lindian’s last closing price of 22.5c on August 15, but a premium to the company's recent volume-weighted averages.

With the placement completed, Lindian now has full funding in place to bring Kangankunde into production by late 2026. The company is targeting about 15 300 t/y of monazite concentrate in its first stage, with a feasibility study projecting a pre-tax net present value of A$1.18-billion and an internal rate of return of 99%.

Executive chairperson Robert Martin said the raising showed global recognition of the project’s scale. “We are delighted with the support we have received from new domestic and international institutional investors for this placement, with demand significantly in excess of funds sought. The demand at a large premium to our VWAP’s and the quality of the investor base attracted, confirms to the market, the support and understanding that our Tier 1 Kangankunde rare earths project now has in the global investment community,” he said.

“To be able to declare the FID sets Lindian on the pathway to being the world’s next rare earths producer, a truly remarkable position for your company to be in. We now have a very clear, fully funded and unencumbered pathway to first production,” Martin said.

The placement follows Lindian’s strategic partnership with Iluka Resources, which is developing Australia’s first fully integrated rare earths refinery at Eneabba, north of Perth. Under the deal, Iluka will provide a A$20-million construction loan and has secured 90 000 t of Kangankunde concentrate under a 15-year offtake agreement.

Stage 2 expansion plans are also under way, with Lindian holding approvals to lift output to as much as 50 000 t/y. Proceeds from the placement will partly fund engineering work and infrastructure for the expansion, alongside increasing Lindian’s ownership of Kangankunde to 100%.

According to the feasibility study, Kangankunde will require preproduction capital of $40-million, which includes 12.5% contingency, making it one of the lowest capital cost rare earths projects under development. Average yearly free-on-board operating cost of $2.92/kg total rare earth oxides positions Kangankunde in the lowest-cost quartile of the global rare earths industry. The project is expected to have a payback period of less than two years.

Martin said the new funding would allow the company to move quickly on procurement and contracting. “The company, now fully funded, will accelerate our already well-advanced pathways to production including finalising major contracts, placing orders for long lead time items, awarding services contracts and fast-tracking our larger Stage 2 studies,” he said.

Settlement of the first tranche of new shares is due on August 25, with shareholder approval for the second tranche to be sought at a meeting on September 8.