Investment structure – Shenghe to acquire a 50% interest in...

• Investment structure – Shenghe to acquire a 50% interest in Ngualla Group UK Limited (“NGUK”), which holds an 84% effective interest in the Ngualla Project, through a subscription of new shares for ~A$96m;
• Fully funded solution – upon completion, Peak will not be required to contribute any additional equity funding towards the development of the Ngualla Project. The difference between the Ngualla Project’s total development costs and Shenghe’s NGUK investment of ~A$96m will be funded via a Shenghe arranged debt facility, which is expected to be on terms more favourable than a typical international project financing facility;
• Profit sharing mechanism – in recognition of Shenghe’s rare earth experience, development expertise and its commitment to secure a funding solution for the development of the Ngualla Project, it shall be entitled to a 55% share of NGUK’s net earnings after tax and will incur a 55% share of net losses after tax for the first 60 months following the commencement of commercial production;