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Colin Hay

Australian Strategic Materials Limited (ASX: ASM) has received a non-binding and conditional Letter of Interest (LoI) from Canada’s official export credit agency (ECA), Export Development Canada (EDC) indicating support for EDC to provide a direct lending debt funding package of up to A$400 million for the construction and execution phase of its rare earths and critical minerals Dubbo Project.

As a result of ongoing discussions regarding funding for the Dubbo Project’s construction and execution phase, the company has garnered attention from ECAs and other parties across different jurisdictions. Particularly, there has been significant interest from government bodies (including ECAs), investors and industry groups in North America. This interest stems from the strong policy alignment between Australia and North American jurisdictions, emphasising the necessity of establishing an alternative critical minerals supply chain.

EDC’s LoI is supported by potential equipment and services supply from Canadian companies for the execution phase of the Dubbo Project. The provision of financing by EDC is subject to successful completion of EDC’s due diligence process, obtaining all requisite EDC internal approvals and typical project finance conditions. The EDC LoI will expire on 25 April 2025.

EDC’s LoI follows both Export Finance Australia’s (EFA) previous conditional finance support of A$200 million debt funding and the recently announced US$600 million (A$923 million) from the Export-Import Bank of the United States (US EXIM)4. EDC’s indicative financial support increases sourcing flexibility and demonstrates the growing confidence in a shared financing for the Dubbo Project.

“We are thrilled with the support received to date from prospective financiers for the Dubbo Project, especially this latest letter of interest from Export Development Canada,” Managing Director and CEO, Ms Rowena Smith, said.

“Our focus has been on building strategic partnerships in North America that support the development of our mine to metals strategy. We see the growing strength of those relationships and the momentum in financial support as recognition of the strength of the Dubbo Project and its significance as a reliable, responsible and secure source of critical minerals. We look forward to working with the EDC and progressing with the due diligence and approval process.”

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