Globe Metals & Mining Ltd (ASX:GBE) has signed a non-binding term sheet with the Industrial Development Corporation (IDC), a key player in economic development across Africa, for a US$10 million convertible loan.
Executing the term sheet takes Globe a step closer to securing essential funding for the early development of the Kanyika Niobium Project in central Malawi.
The company also notes that the collaboration with IDC enhances project credibility while also attracting strategic investors and promoting cross-border collaboration in Malawi. The partnership also aligns with Globe’s commitment to sustainable growth and responsible mining practices.
The US$10 million secured convertible loan from IDC, available partly in South African Rand (ZAR 55 million) and partly in US dollars (US$7.05 million), will provide funding for the following early development activities of the project:
- completion of an updated bankable feasibility study (BFS);
- completion of the detailed front-end engineering design (FEED); and
- certain pre-implementation activities for the project.
A watershed moment
“This planned funding from IDC represents a watershed moment in the development of Globe’s Kanyika Niobium Project,” Globe CEO Paul Smith said.
“The progress made throughout 2024 has been significant. This financial support will allow us to execute crucial components of Kanyika’s development plan, headed by completing an updated bankable feasibility study, the detailed front-end engineering design tasks and certain other pre-implementation activities.
“With the support of IDC and the announced debt financing from Ecobank Malawi, we have now locked in around 54% of the necessary funding for Phase 1 development of Kanyika, which we anticipate will commence in the first half of calendar 2025.
‘We now look forward to providing further updates on our progress in the Phase 1 works over coming months.”
More details
Under the term sheet, the IDC will have the right to convert the loans into shares in Project HoldCo — Globe’s Malawian-registered subsidiary — at a 20% discount after completion of the BFS, FEED, and Early Works, and thereafter have the election to convert its shares in Project HoldCo into shares in GBE.
IDC’s shareholding after exercising the first conversion option is limited to no more than 25% of Project Holdco shares, and a maximum of 19.9% of GBE shares after exercising the second conversion option.
Owned by the South African Government, IDC aligns its priorities with national policies like the National Development Plan. It aims for long-term sustainability, prudent financial management, and leadership in development finance.
To stimulate growth and expansion in the mining sector, IDC has developed a critical minerals game plan that focuses on the support for 17 minerals essential to the green economy and global transition to renewables, electric vehicles, hydrogen and battery storage.