Shenhe Resources plans to acquire a 19.9% stake in Peak for about 179 million yuan to further expand overseas rare earth business.

On the evening of February 11, Shenghe Resources announced that in order to further consolidate the foundation of the company's development, holding company Shenghe Resources (Singapore) Limited (hereinafter referred to as "Shenghe Singapore") intends to acquire 19.9% of PeakRareEarthsLimited (hereinafter referred to as "Peak"), a company listed on the Australian Stock Exchange (hereinafter referred to as "Appian") held by AppianPinnacleHoldCoLimited (hereinafter referred to as "Peak").

Through Sheng and Singapore, a 100% holding company of Leshan Shenghe rare Earth Co., Ltd., a wholly-owned subsidiary, Sheng and Singapore intend to sign a letter of agreement "SHENGHEPURCHASEOF19.90%PEAKSHARESFROMAPPIAN" with Appian (hereinafter referred to as the "agreement letter"). Sheng and Singapore agreed to purchase 39644620 common shares of Peak held by Appian at a price of A $0.99 per share, accounting for about 19.9% of the total issued shares of Peak, with a total acquisition amount of about A $39248173.80. The discount is about 178.905 million yuan.

It has been disclosed that Peak is an Australian listed company headquartered in Perth, Western Australia and listed on the Australian Stock Exchange (symbol: PEK)). It is mainly engaged in the Ngualla rare earth mine project in Tanzania and the Teesside refinery project to be invested in the UK.

Peak's core asset is the Ngualla rare earth mining project owned through its wholly-owned subsidiary PR NGMineralsLtd (in Tanzania, hereinafter referred to as "PRNG". The Ngualla rare earth mine project is located in southern Tanzania, covering an area of 18.14km2. According to the JORC (2012) standard, with 1% as the boundary grade, the ore resources are 214 million tons, with an average grade of 2.15%, equivalent to 4.61 million tons of REO. Rare earth reserves are 18.5 million tons, with an average grade of 4.8%, equivalent to 887000 tons of REO. The proportion of praseodymium and neodymium oxides in rare earth oxides is about 21.26%. A special mining license (SpecialMiningLicence, hereinafter referred to as "SML") is currently being applied for.

In July 2021, PRNG's (SML) application for a special mining license was approved by the Cabinet of the Government of Tanzania, pending a formal grant by the Minister of Mines. PRNG has promised the Tanzanian government that, subject to the formal award of SML by the Minister of Mines, Peak will jointly set up a Tanzanian registered joint venture with the government, to which PRNG will transfer the SML, joint venture, which is 84 per cent owned by Peak (through a wholly-owned entity) and 16 per cent owned by the Tanzanian government. According to Tanzanian law, the Tanzanian government's stake in the joint venture will exist in the form of non-dilutive free equity shares. Next, Peak needs to negotiate and sign an economic framework agreement and an inter-shareholder agreement with the Tanzanian government. The Ngualla rare earth mine project is expected to invest about US $200 million, handle about 800000 tons of raw ore and produce about 37200 tons of rare earth concentrate (45%REO) per year.

Peak plans to build a rare earth refinery at Wilton International Base near the town of Middlesbrough in TeesValley, UK, with an annual production capacity of 9900 to 11600 tons of various rare earth products. The construction and development cost of the project is expected to be about US $165 million. Peak has obtained the lease of 19 hectares of project land for 250 years, and has obtained the environmental permit and planning permission for the construction of the project.

Shenghe Resources adhere to the rare earth business as the core, adhere to both domestic and foreign resources, two markets, to maintain the stable supply of the global rare earth industry chain as the business purpose. If this project can be implemented smoothly, it will help to further consolidate the foundation of the company's development and optimize the company's global business layout.