Geomega Resources secures $3M loan from Quebec government

Geomega Resources Inc., Montreal, says it has secured additional debt financing of nearly $1.33 million to use toward building a rare earth magnet recycling demonstration plant in St. Bruno, Quebec. According to a news release from Geomega Resources, project financing will be provided by Investissement Quebec, which will act as an agent on behalf of the Quebec government to secure funding for the project.

Geomega Resources reports that this financing is in addition to the first tranche amount of $1.72 million that was announced Feb. 7. The debt financing now amounts to nearly $3.05 million and will have the same favorable terms as the first tranche, including that the debt is noninterest-bearing.

The increased amount of debt financing amount is based on an updated project evaluated at $4.8 million, including capital costs and working capital, which was previously estimated at $3.2 million. Geomega says the increased cost results from internal evaluations by the company based on the completed engineering work and adjusts for delays, associated restrictions imposed by the COVID-19 pandemic and engineering work as well as higher costs of engineering and construction.

Geomega says the funds will be used toward the purchase of equipment as well as engineering and construction of the demonstration plant.

Kiril Mugerman, president and CEO of Geomega, says the company is “very grateful” for the support from the Quebec government.

“The Quebec government is working hard to help establish clean and innovative production of the critical metals that will simultaneously create jobs and produce materials needed for the industries of tomorrow,” Mugerman says. “Its commitment to transformation and recycling of rare earth elements will help attract further downstream industries and establish a clean and sustainable rare earths refining industry in Quebec. With this funding portion now complete, we are looking forward to the completion of pilot testing, which we began in August 2020, and then proceed to finalize engineering and begin construction.”