Business
Acquisition of royalty over Phalaborwa project
Acquisition of royalty over Phalaborwa project.
About this update from Ecora Royalties Plc
[{"type":"text","content":"\n\n \n \n \n \n1 July 2024\n \n \nEcora Resources PLC\n(\"Ecora\" or the \"Group\")\n \nAcquisition of royalty over the Phalaborwa rare earths project\n \nEcora (LSE/TSX: ECOR) announces that it has entered into an agreement to acquire a 0.85% Gross Revenue Royalty (\"GRR\") over the Phalaborwa Rare Earths Project (\"Phalaborwa\" or the \"Project\") located in South Africa for a total cash consideration of US$8.5 million. \nIn connection with the royalty acquisition and in addition to the cash consideration, Ecora has subscribed for 10,442,427 new ordinary shares in Rainbow Rare Earths Ltd (\"Rainbow\"), the majority owner of the Phalaborwa project, for US$1.5 million in cash. Rainbow is listed on the London Stock Exchange (LSE: RBW).\nThe investment represents Ecora's first rare earth exposure, and is in-line with the Group's stated strategy of further diversifying and growing its portfolio of future facing commodity royalties over high quality operations and projects.\nMarc Bishop Lafleche, Chief Executive Officer of Ecora, commented:\n \n\"We are delighted to announce our partnership with the Rainbow Rare Earths team on the Phalaborwa project. This project stands out as one of the lowest-cost prospective producers of rare earths outside of China. Notably, production will be principally weighted to rare earth elements essential in the production of permanent magnets, key components in renewable wind power turbines and electric vehicle motors.\n \n\"The transaction provides Rainbow with a non-dilutive means of securing the funding to move the project forward towards the completion of a DFS and subsequently a final investment decision. It also provides Ecora with a counter-cyclical entry point to further diversify our commodity exposure to include rare earth elements whose end markets are forecast to see sustained demand growth over the coming decades.\"\n \nHighlights\n \n· Amongst the highest quality rare earth projects globally with a 16-year estimated mine life1 - expected to generate strong cashflows throughout the commodity price cycle\n· Located on brownfield site treating phosphogypsum stacks generated as a by-product of historical fertilizer production\no No primary mining, crushing or grinding costs\n...