Townsend on how Peak’s rare earths attracted the Appian Fund and the IFC
November 24, 2014 — In a special InvestorIntel interview, Tracy Weslosky, Editor-in-Chief and Publisher for InvestorIntel interviews Darren Townsend, Managing Director for Peak Resources Ltd. (ASX: PEK) on how Peak’s high grade rare earths have attracted financing, ease of processing and offer a competitive Capex and Opex towards project financing.
Tracy Weslosky: I’d like to start by congratulating you. You just announced a major cornerstone deal with the IFC. Congratulations Darren.
Darren Townsend: Thanks a lot Tracy. I really appreciate that. It’s been very good to get them onboard along with Appian.
Tracy Weslosky: Alright so let’s start. For those out there that may not understand the Peak Resources story, one of the fifth, reputed to be the fifth largest deposit outside of the People’s Republic of China for rare earths. Let’s start at the top. You recently secured a commitment for $25 million dollars in financing from the Appian Fund, is that correct?
Darren Townsend: We were really happy to get that transaction announced. We’ve been working with Appian since May of this year so we’ve been through a pretty thorough process and very happy to be working with them.
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Tracy Weslosky: As a result of the Appian Fund and the financing from them this was— this helped you allow you to secure the IFC interest. Is that correct?
Darren Townsend: Yeah, that’s right. I mean, Appian are a very good long-term private equity group and they’re not just a source of funding. They bring a good technical and operational team with them. The group had built over 30 mines in Africa and have raised over $200 billion dollars historically for various mining ventures. They’re a very well credentialed, well connected group. They were actually the guys that introduced the IFC and brought the IFC into the deal. It’s been a great, great success for us.
Tracy Weslosky: Well, I understand you have to have a really great business model to secure the IFC, but also you had a non-binding MOU for an end-user agreement with a Chinese company. Now was this part of what attracted them to you?
Darren Townsend: I think the main thing that’s attracted both Appian and the IFC is just the high-grade of the ore body, the fact that 71% of our revenue comes from neodymium, praseodymium and also our simple mineralogy. We’re quite unique in that we’re a simple, sort of, bastnasite deposit. Mother Nature’s already done a lot of the hard work so it’s taken away basically the carbonate and the phosphate minerals so we’ve got a very simple ore body. That’s the main driver, but obviously a key thing will be in getting offtake in place. We’re actually in the process of appointing a full-time marketing manager at the moment to continue to drive out discussion in Europe and/or also in China or Asia in general.
Tracy Weslosky: Right now one of the top topics that we have on InvestorIntel is over processing. Everyone’s processing, processing, processing, but what’s unique about Peak is that your processing is quite easy comparatively and contributes to your low capex. Is that correct?
Darren Townsend: Yeah, that’s right. I mean, rare earths still in general compared to gold and copper, et cetera is still at the more complex end of the processing scale. Yeah, we have a real distinct advantage in after our beneficiation process where we’ve now announced in August this year, we can now get up to a plus 30% concentrate grade.
To hear the rest of the interview, click here
Disclaimer: Peak Resources Ltd. (ASX: PEK) is an advertorial member of InvestorIntel.
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>