Lindian locks in $91.5M to greenlight Malawi rare earths mine

Lindian Resources’ share price has jumped out of the gates today on heavy turnover and hit another fresh high of 26.5 cents a share, after the company banked $91.5 million from an oversubscribed jumbo placement.

The new funding clears the decks for the company to start full-scale construction of its flagship Kangankunde rare earths project in Malawi.

The capital raising was struck at 21c a share from the issue of 435.7 million shares spread over two tranches. Lindian said the offer drew a stampede of support from local and international institutions and that bids flooded in well above the target.

Investor demand was so strong that Lindian only had to trim 6.7 per cent off its last close to seal the deal. Against recent trading averages, the placement was even sweeter, coming in at a 12.5 per cent premium to the five-day mark and a whopping 48 per cent above the 20-day average.

Now the cash has been secured, the board has quickly moved to sign off on a final investment decision, which will allow the company to break ground on stage one of Kangankunde. It has locked in first production for the fourth quarter of 2026.

Declaring the final investment decision sets Lindian on the pathway to being the world’s next rare earths producer, a truly remarkable position for the company to be in. We now have a very clear, fully funded and unencumbered route to first production.

The project hosts a globally significant deposit with a 45-year mine life, ore reserves grading 2.9 per cent total rare earth oxides (TREO) and low radioactive levels - a combination hard to find in the rare earths world.

Stage one construction will see Lindian build a straightforward open-pit mine coupled with a simple gravity and magnetic processing plant capable of churning out about 15,300 tonnes per year of premium monazite concentrate grading 55 per cent TREO.

Even with rare earths prices stuck in the doldrums, Lindian’s numbers shine – its feasibility study pegs Kangankunde at a pre-tax net present value of US$794 million (A$1.225 billion) with a blistering 99 per cent internal rate of return and payback in barely a year.

Lindian says it is already looking well beyond its first pour. Hot on the heels of a mining licence expansion from 900 hectares to 2500ha, management is eyeing a stage two development that could lift output to as much as 50,000t a year. Engineering studies are already underway to design a modular expansion, and a chunk of the placement proceeds have been earmarked to fast-track this growth pipeline.

ASX heavyweight Iluka Resources has backed the company by locking in a 15-year offtake deal for 6,000t a year of concentrate from Kangankunde to feed its Eneabba refinery in Western Australia. The agreement also gives Lindian guaranteed revenue, with a floor price set above its production costs, cementing rock-solid economics from day one.

Iluka has further sweetened the deal with a US$20 million (A$31 million) loan to fast-track stage one construction and grabbed first rights over stage two production of up to 25,000t a year for 15 years. In return, the mining major must cover half of Lindian’s expansion costs and agree to new commercial terms, such as pricing. If it takes up the option, Iluka could secure up to 31,000t of monazite concentrate a year.

Iluka’s fully integrated Eneabba refinery, now under construction, is a first for Australia and has been largely funded by a $1.65 billion non-recourse loan from the Federal Government’s $2 billion critical minerals facility.

For Lindian, the pieces are falling neatly into place. With funding in the bank, Iluka at its side and one of the world’s best undeveloped rare earth deposits ready to crack open, the company has vaulted from hopeful explorer to fully funded developer in record time.

All eyes are now on Kangankunde as the countdown begins to 2026, when Lindian aims to join the elite ranks of the world’s rare earths producers.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au