GEN starts early works, including haul road for green iron ore project

Published 02-APR-2025 16:04 P.M.

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Earlier in the week our green iron ore Investment, Genmin (ASX: GEN) kicked off early construction work on it’s project in Gabon.

Only 9 days ago, GEN signed a Mining Convention agreement with the Gabon government.

The Mining Convention specifies both GEN’s and the Government’s obligations regarding GEN’s project, including those pertaining to legal, social, environmental, and financial matters, including royalty, tax, and free-carry.

The signed agreement also means GEN have no other permitting hurdles to get project into production.

The only other hurdle left now is project financing.

This week, GEN kicked off some of the early works to build out the 60km haul road that will link it’s project to existing rail infrastructure.

A good start to work, so soon after the Mining Convention was signed.

Update on project financing:

This week’s announcement also had a minor update on financing.

GEN confirmed that discussions were ongoing with “several of its potential Chinese offtake partners” aswell as “Multiple other parties including a trading company, a construction company, a mining company and a non-Chinese end-user”.

GEN also mentioned that London based Oval Advisory was being retained as independent advisor to try and tap into other capital markets for funding.

It looks like GEN are working on all different parts of the financing (equity/debt/prepayment) all at the same time.

To get to where it is today, here’s what GEN has already ticked off:

The only thing left for GEN to secure is project financing.

For the last ~12 months GEN’s been warming up potential financiers.

Our view is that all of that groundwork done over the last 12 months can now be leveraged to get a potential financier over the line.

It would make sense that any financiers would have wanted to see GEN firm up all of the technicalities for it’s project through a Mining Convention agreement.

Now that the agreement is signed, we think financiers will be a lot more comfortable getting into more serious conversations with GEN.

Foster Stockbroking analyst Mark Fichera recently published a report where he also talks about GEN being in a far better position (from a financing perspective) post- Mining Convention.

Foster’s have a 33 cent price target for GEN which is well above today’s 4.3c share price.

You can read the full report here: ASX:GEN Fosters Report, 26 March 2025

What’s next for GEN?

Project financing update (US$200M CAPEX financing)

We want to see GEN show a pathway to getting its project financed and into construction.

Milestones

🔲 Confirm funding strategy

🔲 Secure debt financing

🔲 Secure equity financing

🔲 Secure binding offtake agreements

🔲 Secure prepayments for offtake or other strategic capital partners.

Convert offtake MoU’s into binding agreements

In the near term we are looking for GEN to make progress across its offtake MoUs.

With 4 non-binding MoUs for offtake already secured, we think GEN will be looking to make these offtakes binding and in doing so, firm up the financing picture.

We expect there would be some competitive tension around GEN’s premium product - and things could move quickly once any of these 4 MoUs are converted into a binding agreement.