Kanyika Niobium Project Offtake MOUs Cover Full Phase 1 Output; BFS Delayed to June
Globe Metals & Mining has signed two non-binding MOUs covering up to 100% of Phase 1 production at its Kanyika Niobium Project, while finalising its updated Bankable Feasibility Study is delayed to June 2025. The company also secured additional short-term funding to support ongoing development.
- Two non-binding MOUs signed covering full Phase 1 production of Niobium and Tantalum Pentoxide
- Updated Bankable Feasibility Study delayed to June 2025 for economic optimisation
- Additional US$1.4 million short-term loan facility secured from Director Bo Tan
- Cash at quarter-end $0.24 million with $2.9 million debt outstanding
- Niobium and Tantalum prices rose in Q3 FY25, supporting project economics
Progress on Offtake Agreements
Globe Metals & Mining Limited (ASX: GBE) has taken a significant step forward in advancing its Malawi-based Kanyika Niobium Project, signing two non-binding Memoranda of Understanding (MOUs) that collectively cover up to 100% of the planned Phase 1 production of both Niobium Pentoxide and Tantalum Pentoxide. These agreements, inked in late Q3 and early Q4 FY25, include a framework with Singapore-based Myst Trading Pte Ltd for 100% of tantalum production and a right of first refusal on niobium, alongside a similar MOU with Neo Performance Materials Inc for 150 tonnes of niobium and potential rights on tantalum and zirconium.
These MOUs, while non-binding, represent a critical milestone in securing offtake commitments that underpin the project’s commercial viability and financing prospects. If converted into binding agreements, they would complement an earlier non-binding Letter of Intent with Affilips N.V., collectively covering the entire initial Phase 1 output.
Bankable Feasibility Study Delayed for Optimisation
The updated Bankable Feasibility Study (BFS), originally expected earlier, has been delayed to June 2025. Globe’s management emphasizes that this delay is strategic, allowing the study team to refine project phasing and production volumes to optimise economics. This meticulous approach aims to reinforce the project’s robust fundamentals amid a favourable market backdrop.
Financial Position and Funding
Globe’s cash position at the end of March 2025 stood at $0.24 million, down slightly from $0.28 million at the end of December 2024, with total debt rising to $2.9 million. To support working capital needs and BFS completion, the company secured an additional short-term loan facility of up to US$1.4 million from Director Bo Tan, augmenting an existing loan facility. These loans carry high interest rates (20-25% per annum) and are unsecured, reflecting the company’s current funding challenges but providing critical runway.
Market Dynamics Bolster Project Outlook
Demand for niobium and tantalum remains strong, with benchmark prices rising approximately 4% and 7% respectively during the March quarter, driven by supply chain disruptions and geopolitical tensions in key regions. The Kanyika Project’s strategic location and scale offer a valuable diversification of supply for global markets increasingly focused on critical minerals. The UK’s recent addition of niobium to its critical minerals list underscores the metal’s growing strategic importance.
CEO Paul Smith highlighted the importance of progressing the MOUs to binding agreements and expressed confidence that the BFS will confirm Kanyika’s superior economic viability. The company’s focus remains on finalising these agreements and securing funding to transition the project from evaluation to development.
Operational and Corporate Update
No substantive mining or production activities occurred during the quarter, with expenditures focused on evaluation and study work. The company’s share structure remains stable, with 694.6 million shares on issue and a concentrated top 20 shareholder base. The Malawi government retains a 10% free equity interest option in the mining licence, though no formal notification has been received to date.
Bottom Line?
As Globe Metals edges closer to binding offtake agreements and BFS completion, its ability to secure sustainable funding will be pivotal for advancing Kanyika’s development.
Questions in the middle?
- Will Globe convert the non-binding MOUs into binding offtake agreements, and on what timelines?
- How will the delayed BFS impact project financing and development schedules?
- What are the risks associated with the company’s high-interest unsecured loans and limited cash reserves?
