News Madagascar Toliara: Energy Fuels, Madagascar Government execute MOU for Toliara project
Energy Fuels (UUUU) has entered into a Memorandum of Understanding with the Government of Madagascar setting forth certain key terms applicable to the Company’s Toliara titanium, zirconium, and REE project, located in southwestern Madagascar. As previously announced, on November 28, 2024, the Madagascar Council of Ministers, as Chaired by the President of Madagascar, lifted the suspension on the Toliara Project, which was originally imposed in November 2019. The lifting of the Suspension allows the Company to continue development of the Project, re-establish community programs, and advance activities necessary to achieve a positive final investment decision. The MOU announced today is the culmination of extensive negotiations over several years with the Malagasy Government on fiscal and other terms applicable to the Toliara Project and a major step forward in advancing the Project. While the Company is progressing towards an FID, which is expected to be made in approximately 14 months, the Company will continue working with the Government of Madagascar to formalize the terms and conditions set out in the MOU through the implementation of a "Stability Mechanism" consisting of one or a combination of the following: submittal of an Investment Agreement to the Madagascar Parliament for approval as law and certification of the Toliara Projectunder existing law establishing a special regime for large scale investments in the Malagasy mining sector; promulgation of amendments and revisions to the existing LGIM in a form that provides for the necessary certainty of financial and legal terms, and reasonable financial, operational and legal requirements, for large-scale projects and have Project Certification under the amended LGIM, together with an Investment Agreement submitted to Parliament for approval as law; and/or another agreed upon mechanism that achieves the necessary certainty of financial and legal terms, and reasonable financial, operational and legal requirements, applying to large-scale mining projects. Under the MOU, the Company has agreed to pay a five percent royalty on mining products and deliver $80 million after Project Certification in development, community, and social project funding, including a total of $30 million within 30 days after Project Certification, another $10 million within 30 days after achieving a positive FID and an additional $40 million by the fourth year of operations. In addition, the Company has agreed to spend at least $1 million prior to FID in the Atsimo Andrefana Region on community and social investments, and $4 million annually thereafter, indexed at 2% per annum, from commencement of construction after a positive FID. The Company has also committed to developing the Toliara Project in an environmentally, socially and fiscally responsible manner, and to observe the specific protections set out in the MOU. The payments described above are not expected to have a material effect on the economics of this potentially multi-billion project, which are described in the Company’s April 2024 press release. The Company is in the process of updating the September 2021 definitive feasibility study and December 2023 prefeasibility study on the Toliara Project, along with the White Mesa Mill’s 2024 prefeasibility study on rare earth oxide production, to reflect current economics. The Government has agreed in the MOU, among other things, to: assist the Company with obtaining all necessary administrative authorizations for the purpose of adding REE-bearing monazite recovery to existing permits; certify the Project as eligible under the LGIM as soon as the LGIM eligibility conditions are met; support the prompt development of the Toliara Project, including by causing all relevant State authorities to timely consider and grant all complete applications for permits, licenses or authorizations necessary or desirable for the development and operation of the Toliara Project in accordance with the laws of Madagascar; maintain the fiscal, legal and customs stability of the Toliara Project; not, directly or indirectly, receive, take or have an interest in the Company or any of its assets, including the Toliara Project; provide active and public support for the Toliara Project, including by publicly announcing the State’s support for the Toliara Project and its development; and undertake any LGIM amendments in consultation with relevant stakeholders, including the Company, to ensure that such amendments provide the necessary certainty of financial and legal terms to address the reasonable financial, operational and legal requirements of large-scale mining projects, and otherwise supports the bankability of the Toliara Project and the ability of the Company to achieve a positive FID.Don't Miss our Black Friday Offers:Unlock your investing potential with TipRanks Premium - Now At 40% OFF!Make smarter investments with weekly expert stock picks from the Smart Investor NewsletterPublished first on TheFly – the ultimate source for real-time, market-moving breaking financial news. 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