Lindian Resources Ltd (ASX:LIN) has completed its first tranche payment to acquire a 100% interest in Malawi company Rift Valley Resource Developments Limited.
Rift Valley owns the globally significant Kangankunde Rare Earths Project, for which Lindian is paying US$2.5 million, consisting of a non-refundable deposit, payable to the Malawian company.
The payment is the first of four tranche payments totalling US$30 million, with a further US$27.5 million payable in three tranches within 48 months from the signing date.
The acquisition is subject to Lindian shareholder approval.
All legal and regulatory requirements in Malawi have now been complied with and the Tranche 1 payment is another important step forward for Lindian and its development plans for Kangankunde.
Notably, Lindian has the right, but not the obligation, to make the remaining payments sooner, to accelerate the acquisition.
Important milestone
Lindian chairman Asimwe Kabunga said: “This first tranche payment is an important milestone for Lindian, following a multi-year period of engagement with key stakeholders to secure 100% of the Kangankunde Rare Earths Project. With the formal completion of the Tranche 1 payment, Lindian has demonstrated its ability to execute on a successful acquisition through long-term negotiations that balance the objectives and requirements of the vendors, project investors, regulators, policy makers and community representatives.
“As advised, the transaction remains subject to shareholder approval, while we look forward to updating the market with our ongoing development plans at Kangankunde – widely regarded as one of the most mineral-rich rare earths deposits in the world.”