Sunrise Flags Conditional US$400m U.S. Govt Loan

Sunrise Energy Metals Limited (ASX:SRL) announced that the U.S. Department of War's Office of Strategic Capital has confirmed a conditional commitment of up to US$400 million, stated as approximately A$570 million at an assumed exchange rate of US$0.70, in long-term debt financing to support development of the company's 100%-owned Syerston Scandium Project in New South Wales. The company said the conditional commitment does not constitute an offer, agreement or binding commitment to provide financing and remains subject to due diligence, the negotiation and execution of definitive documents and the satisfaction of other conditions precedent set out in the commitment letter. Subject to financial close, the proposed loan would have a maturity of 25 years, with funding intended to be made available in phases and each disbursement subject to the company's achievement of project milestones, deployment of specified amounts of equity and receipt of binding offtake agreements. Sunrise also said it has commenced preparations to list on a U.S. securities exchange in addition to, and while retaining, its ASX listing, which it said would require shareholder, court and regulatory approvals, and included a cautionary statement that there can be no assurance definitive financing documents will be executed, that financial close will occur, that a U.S. listing will be completed or that any amount will ultimately be drawn.

The initial development is designed to produce approximately 60 tonnes per annum of high-purity scandium oxide over an estimated 32-year operating life, calculated on the Syerston Ore Reserve Estimate effective 30 September 2025 and the 60 tonnes per annum target capacity, with a second phase under evaluation that could add 120 tonnes per annum for total potential production of 180 tonnes per annum. Sunrise said that through its engagement with the Office of Strategic Capital the project scope has been significantly revised and broadened to include construction of scandium metal refining capacity in the United States, associated refinery modifications to produce a range of chemical-grade scandium compounds, capital brought forward for utilities and civil infrastructure to preserve expansion options, and the cost of power generation moved into capital expenditure rather than off-balance sheet financing. On that revised scope, and reflecting the re-tendering of key contracts originally priced early in 2025, with higher construction, equipment and capital costs now reflected in the updated estimate together with a materially increased contingency allowance, a revised capital estimate of approximately A$450-475 million, or US$315-333 million, has been presented to the Office of Strategic Capital. The company said capital estimates remain at different levels of maturity and will be finalised over August 2026, with the objective of enabling a positive Final Investment Decision recommendation to be presented to the Board in 2H26; early works construction and procurement of long-lead items have commenced with a view to preserving a first production target of 2H28.