Analysts at Canaccord Genuity project a gross capital expenditure of A$570 million for Peak Rare Earths' (ASX:PEK) Ngualla project in Tanzania.

Peak Rare Earths has signed a seven-year binding off-take with Chinese rare earth producer Shenghe Resources for supply of 100% of its high-grade rare earth mineral concentrate from Ngualla.

A delay in the project schedule for Ngualla has been signaled by the company, with the final investment decision (FID) now aimed for May 2024.

This FID delay has led the brokerage to anticipate the start of the Ngualla project’s construction to be in the September quarter of 2024, with the first production slated for the March quarter of 2026.

Despite the delay, Canaccord maintains a price target of A$0.90/share, believing the delay is balanced by the binding agreement.

While the binding agreement with Shenghe suggests the potential for a stake buy in the project, Canaccord anticipates that Peak Rare Earths will opt to maintain majority ownership.

Peak Rare Earths is a mining company focused on the exploration and development of rare earth mineral resources.