Queensland’s push to strengthen its critical minerals supply chain has taken another step forward, with Ark Mines (ASX:AHK) securing a $4.5 million investment from the state-owned QIC Critical Minerals and Battery Technology Fund (QCMBTF).
The funding package is designed to accelerate work at the company’s Sandy Mitchell Rare Earth and Heavy Mineral Project, located 230km northwest of Cairns. It marks one of the largest early-stage investments in a rare earths project in North Queensland and comes as governments worldwide look to secure supplies of minerals essential to the clean energy transition.
Executive Sees “Significant Step Forward”
Ark Mines Managing Director Ben Emery said the agreement reflects months of work between the parties.
“We are pleased to announce this funding agreement with the QCMBTF, which follows an extensive period of engagement with the Fund and marks a significant step forward in our strategy to develop Sandy Mitchell through to production,” he said.
He added that the structure of the funding reduces dilution for existing shareholders.
“With a busy works program scheduled for the second half of 2025, this investment provides Ark with an effective non-dilutive source of funding to accelerate development.”
Aligning With State Strategy
The QCMBTF was set up to back Queensland-based projects that can deliver both jobs and supply chain resilience in critical minerals. The Sandy Mitchell project is expected to create around 80 jobs once in production.
For Emery, the deal represents more than just a capital injection.
“Strategically, it also delivers long-term alignment with the state government’s policy objective to position the North Queensland region as a key supplier of the critical minerals used in global clean energy supply chains,” he said.
“Our goal now is to establish Ark Mines as a leading Australian rare earths supplier, serving end users in domestic and international markets.”
Funding Structure Combines Royalties And Equity
The $4.5 million package includes:
- $4 million up-front funding tied to a royalty of 2% of gross revenues from future product sales at Sandy Mitchell; and
- $500,000 equity investment, subject to shareholder approval.
Royalties will be calculated and paid quarterly, while Ark Mines will issue nearly 3 million new shares at $0.167 per share to meet the equity component. Security over the project tenements and standard reporting obligations form part of the agreement’s terms.
Infill Drilling To Expand Resource
The funds will go directly into advancing the Sandy Mitchell project, where Ark is targeting an upgrade to its existing measured mineral resource of 71.8 million tonnes at 1,732.7ppm Monazite Equivalent (MzEq), calculated using a 700ppm MzEq lower cut-off grade.
Stage-3 infill drilling is already underway, with results to be incorporated into a Pre-Feasibility Study (PFS) scheduled for early 2026. The PFS is expected to refine project economics and set the stage for Ark’s production target of late 2027.
Emery said exploration results could soon add to the project’s scale.
“We look forward to updating our investors on more key developments in the coming months, led in the near-term by a comprehensive infill drill program which we expect will deliver a significant increase to the current measured resource of MzEq at Sandy Mitchell.”
Government-Backed Momentum
The QCMBTF is a $150 million investment vehicle managed by QIC, which oversees more than $131 billion in funds. Its mandate is to support growth-stage businesses that can expand Queensland’s role in the global critical minerals sector.
For Ark Mines, the support of a government-backed fund adds weight to its ambitions in rare earths at a time when demand is surging. With drilling underway and a PFS in the pipeline, the company is now funded to advance toward its late-2027 production goal.
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