Defense Metals Corp (TSXV: DEFN) may have secured federal funding for the development of their Wicheeda Rare Earth Element Project in BC. The company has secured a letter of interest from Export Development Canada for the potential funding.
The LOI outlines that the export credit agency may serve as the mandated lead arranger for a debt financing of up to US$250 million for the development and construction of Wicheeda. The expression of support follows the company requesting potential financing support from the agency.
“EDC’s prospective support can serve as an anchor to mobilise a comprehensive debt package. We are also encouraged by the recent creation in Canada, Europe and elsewhere of a number of very large government backed equity funds with mandates to finance in projects like Wicheeda,” commented Mark Tory, CEO of Defense Metals.
WATCH: Defense Metals: The Rare Earth Project Pre Feasibility Study
A pre-feasibility study released earlier this year identified Wicheeda as having a net present value of $1.0 billion and an internal rate of return of 18.9% using an 8% discount rate. The proposed mine would operate for 15 years under the model, producing on average 31,900 tonnes of total rare earth oxide in concentrate.
Initial capital expenditures for the project are estimated at US$1.44 billion, meaning additional debt financing, on top of the potential support from Export Development Canada, would be required.
Defense Metals last traded at $0.145 on the TSX Venture.
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