Namibia Critical Metals (TSX-V:NMI, OTCQB:NMREF) announced that Japan Organization for Metals and Energy Security (JOGMEC) and Toyota Tsusho Corporation have established TJ Namibia Rare Earths Corporation (TJNREC), a jointly owned special purpose company that will hold Japan's 50% participating interest in the Lofdal Heavy Rare Earth Project in Namibia.
The company said the formation of TJNREC coincides with the completion of Japan's previously announced C$23 million earn-in commitment under the joint venture agreement.
The final portion of the funding included approximately C$11 million for the expanded Definitive Feasibility Study (DFS) budget approved earlier this month.
Completion of the earn-in gives TJNREC a 50% participating interest in the Lofdal project, subject to approval from the TSX Venture Exchange and Namibia Critical Metals (TSX-V:NMI, OTCQB:NMREF) shareholders.
JOGMEC has also committed to invest up to C$47.668 million, or approximately ¥5.5 billion, into TJNREC. The company said an initial investment was completed on July 23, with the capital intended to fund completion of the DFS and support the project toward a final investment decision.
Namibia Critical Metals (TSX-V:NMI, OTCQB:NMREF) said the completion of the earn-in marks a transition to a new funding structure under the joint venture agreement. Future approved project funding before a final investment decision will be classified as Pre-FID Capital Funding, meaning additional funding will not dilute Namibia Critical Metals (TSX-V:NMI, OTCQB:NMREF)' ownership interest and will be non-interest bearing before a final investment decision is made.
The company said the funding is expected to support completion of the DFS, permitting, detailed engineering, long-lead procurement activities and other approved pre-development work.
Namibia Critical Metals CEO Darrin Campbell said the announcement marked the completion of a six-year partnership milestone with JOGMEC and the beginning of a new phase for the project.
"Japan has now completed its C$23 million earn-in, Toyota Tsusho has formally joined the partnership, and TJ Namibia Rare Earths Corporation has been established to finance the project through Definitive Feasibility and toward development," Campbell said.
"JOGMEC's announcement that it will invest up to C$47.668 million into TJNREC demonstrates the depth of Japan's long-term commitment to this project and provides another clear endorsement of Lofdal's strategic importance to future critical mineral supply chains."
Campbell added that the transition to Pre-FID Capital Funding would allow the project to continue advancing without diluting Namibia Critical Metals' ownership or accruing interest before a final investment decision.
“We believe this is a highly attractive funding structure that significantly de-risks the project while preserving meaningful value for our shareholders,” he said.
Lofdal is focused on heavy rare earth elements including dysprosium, terbium and yttrium, which are used in permanent magnets for electric vehicles, robotics, defence systems, electronics and renewable energy technologies.