Wyloo Metals swoops in early on Yangibana rare earths mine in move hoped to plug funding gap

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Wyloo Metals swoops in early on Yangibana rare earths mine in move hoped to plug funding gap

The Forrest family’s mining offshoot Wyloo Metals has called off a $220 million debt arrangement with Hastings Technology Metals in exchange for majority ownership of its half-built rare earths operation in the Gascoyne.

The pair revealed on Thursday they had locked in a non-binding joint venture deal originally set out in August 2022 that would ultimately grant Wyloo 60 per cent ownership of the Yangibana rare earths and nobium project.

The transaction goes a way in solving the $300-plus million Hastings needed to build the first and second stages of the rare earths mine and processing plant, and solidifies a push by Wyloo into the commodity used in magnets and defence.

It comes after Wyloo was forced to put its main asset — the Kambalda nickel mine — into care and maintenance in early 2024 as prices collapsed. It is also working to develop another nickel project in Canada.

Wyloo will own 60 per cent of the project, manage the joint venture and take over as operator, and Hastings will own the remaining 40 per cent and be entitled to the same share in revenue.

Crucially the pair will also share responsibility of finding cash to bankroll the next stage of the $474m rare earths mine and processing plant.

The rare earths hopeful was among companies caught up in a string of mining construction cost blowouts over the past three years. Costs to develop its flagship steadily crept up to the $1 billion mark, prompting the group to rethink the build process and timelines.

Provided shareholders agree to the deal at a vote in April, Hastings said partnering up with Wyloo will knock $126m off its funding obligations to the development.

Hastings will also sell 19.99 per cent of its stake in Neo Performance Materials, a *********-listed business with a rare earths magnet factory over in Estonia, to further offset the exchangeable notes instrument agreed to several years ago.

The notes were originally due to expire in October 2025.

Hastings’ executive chairman Charles Lew said the joint venture was the result of “ongoing, positive discussions” regarding the pair’s financial links and was a “mutually beneficial way to proceed with the development of Yangibana”.

“The early termination of the Wyloo Exchangeable Notes and bringing in a strong partner at this juncture where $226m has already been spent by Hastings as part of the Phase 1 and Phase 2 project development, will bring greater certainty to final funding and on more competitive terms.”

Wyloo chief executive Luca Giacovazzi said it was an exciting time to be a major partner in a multi-decade critical minerals project.

“Yangibana is one of the most advanced rare earths projects in Australia and will become a globally significant source of (neodymium and praseodymium), a critical component in the manufacture of permanent magnets, as well as a producer of niobium and other by-products critical to the energy transition,” he said.

“We look forward to working more closely with both Hastings and Neo across the mine to magnets supply chain as we expand our critical minerals portfolio.”

The agreement comes three months after Wyloo raised “solvency and governance concerns” regarding Hastings when it borrowed $5m from investing outfit Equator Capital, and claimed there had been a default event regarding the notes.

Wyloo eventually withdraw the notice, but said it would be looking to call in its ownership of the notes ahead of the October maturity date.

Hastings shares closed the day 16.1 per cent higher to 36¢.

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