What happens if "we" do say "NO!", page-29

i've run this through chat gpt a few times with slightly different wording, but the answers are always similar

things started getting complicated once they started creating new companies (mamba, NGUK etc) and suggested change in strategy through the term sheet agreement

note - it refers to "financial close" which comes after FID - make of it what you can

anyway.........

Q - what are the termination conditions for shenghe & peak rare earths over their off take agreement and is it still ongoing?

A -

As of May 2025, the offtake agreement between Peak Rare Earths and Shenghe Resources remains active and is progressing through its development phases.stockhound.com.au+3Mining Technology+3Investing News Network (INN)+3

Termination Conditions

The binding offtake agreement, executed in August 2023, includes specific termination clauses:Investing News Network (INN)+1Mining Technology+1

• Financial Close Requirement: If financial close on a project funding solution is not achieved within six months following the completion of the Front-End Engineering and Design (FEED) study, either party has the right to terminate the agreement.*+3Investing News Network (INN)+3Mining Technology+3

• Default Clause: The agreement can be terminated if an event of default occurs and is not remedied within 30 days.Investing News Network (INN)

Current Status

The agreement is currently in effect, with the following key milestones and conditions:

• Initial Term: Seven years, with the possibility of extension by mutual agreement.Seetao+5Investing News Network (INN)+5Mining Technology+5

• Product Offtake: Shenghe is obligated to purchase 100% of the rare earth concentrate and at least 50% of any intermediate and final rare earth products produced from the Ngualla Project.SEC+8Investing News Network (INN)+8stockhound.com.au+8

• Take-or-Pay Basis: Shenghe is required to pay for and take delivery of all agreed products, ensuring revenue stability for Peak Rare Earths.Investing News Network (INN)+1Mining Technology+1

• Pricing Mechanism: Market-based pricing formula based on the value of contained rare earth oxides, with deductions for VAT, trading fees, refining recoveries, charges, and margins.Investing News Network (INN)+1Mining Technology+1

• Shipping Terms: Cost, Insurance, and Freight (CIF) to designated Chinese ports.Investing News Network (INN)

• Invoicing Options: Peak has the option to receive 90% of the provisional invoice via a Letter of Credit prior to shipment or 80% via telegraphic transfer within five business days of shipping documents being delivered, with the balance payable within 30 days of Chinese customs clearance.Investing News Network (INN)

Additionally, Peak and Shenghe have signed a non-binding Memorandum of Understanding (MOU) to collaborate on an integrated Engineering, Procurement, and Construction (EPC) and project funding solution for the Ngualla Rare Earth Project.This includes Shenghe arranging a fixed-price, turnkey EPC solution and providing project funding.The MOU also outlines the potential for Shenghe to acquire a significant non-controlling equity interest in the Ngualla Project, which would substantially lower Peak’s funding requirements.Mining Technology+3Investing News Network (INN)+3stockhound.com.au+3

The target timeline for the Ngualla Project includes a final investment decision and start of construction by the end of May 2024, with completion of construction and development by early 2026.Mining Technology+4Investing News Network (INN)+4Seetao+4

As of now, there have been no public announcements indicating that the termination conditions have been triggered, and the agreement appears to be proceeding as planned