Neo Performance Materials Inc. recently announced it has entered into a loan agreement with Export Development Canada for a term loan of up to US$50 million to finance the on-going construction of the sintered magnets facility in Narva, Estonia.
Highlights of the Credit Facility:
- The Credit Facility of up to US$50 million will be advanced in two tranches of US $25 million and will mature five years from the date hereof.
- Principal repayment will begin two years from the date hereof.
- The outstanding principal amount carries an interest rate equal to the secured overnight financing rate, as administered by the Federal Reserve Bank of New York, plus an applicable margin.
- Several of the Company’s subsidiaries, including the entity that owns the Project, are expected to provide guarantees and/or security in favour of EDC pursuant to the Loan Agreement.
Neo will use the Credit Facility to advance its new sintered magnets manufacturing facility in Narva, Estonia, which is expected to be completed in 2025. Strategically located near Neo’s existing rare earth separation plant, Phase One of the new facility’s operations is expected to produce 2,000 metric tons per year, with plans for future growth. Sintered magnets are critical to fast-forwarding the green transition. They are used in applications such as traction motors for electric vehicles and generators for wind turbines.
Initiated in 2023, the construction is progressing on time and on budget, with an estimated cost of US$75 million. The facility has obtained significant support, including a grant of up to US$20 million (€18.7 million) from the European Union’s Just Transition Fund (“JTF”) in 2022. As of the first half of 2024, Neo has capitalized US$24.9 million since the project’s inception. The remaining estimated cost of US$50.1 million (prior to the JTF grant) is anticipated to be spent through the end of 2024 and into 2025.
“Neo is pleased to have EDC’s support to advance our new sintered magnets manufacturing facility. Strategically located in Estonia to support the mid-to-downstream integration with our Silmet rare earth separation facility, this manufacturing facility will be Neo’s first to produce made-in-EU rare earth magnets for electric vehicle traction motors. It will service the growing demand for localized, parallel supply chains, shaping the future of EV manufacturing in Europe and North America,” said Rahim Suleman, Neo’s President and Chief Executive Officer.
About Neo Performance Materials
Neo is fast-forwarding the green energy transition by manufacturing the building blocks of many modern technologies that enhance efficiency and sustainability. Neo’s advanced industrial materials – magnetic powders and magnets, specialty chemicals, metals, and alloys – are critical to the performance of many everyday products and emerging technologies. Neo’s products help to deliver the technologies of tomorrow to consumers today. Neo’s business is organized into three divisions: Magnequench, Chemicals & Oxides, and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada, with corporate offices in Greenwood Village, Colorado, United States; Singapore; and Beijing, China. Neo has a global platform that includes 10 manufacturing facilities in China, the United States, Germany, Canada, Estonia, Thailand and the United Kingdom, and one dedicated research and development centre in Singapore.
For more information, please visit www.neomaterials.com.
