Iondrive (ASX:ION) is progressing a proposed $18 million senior debt facility as part of the funding and development strategy for its first commercial IONSolv rare earth recycling module in Oklahoma, according to a Thursday Australian bourse filing.

The company said it is validating a pathway for a US Department of Agriculture loan guarantee of up to 80%, which could cover up to $14.4 million of a targeted $18 million facility, subject to eligibility, underwriting and final approval from the department.

Iondrive is assessing several prospective lenders capable of originating the facility and progressing the application, which, upon completion, could reduce the new equity required to establish and commission the first module, it said.

The company's shares fell 5% in recent Thursday trade.