(Alliance News) - Rainbow Rare Earths Ltd on Tuesday said it has secured funding from Pipestone Capital Inc in the form of a USD1.0 million loan.
Pipestone Capital is an affiliate of Rainbow Rare Earths Chief Executive George Bennett, who also owns 8.6% stake in the mining company.
The one-year loan carries no interest but includes warrants over 2 million Rainbow Rare Earths shares at 4.55 pence each. The company said it expects to repay the loan from the proceeds of any future fundraise.
Rainbow Rare Earths shares were flat at at 3.15 pence each on Tuesday afternoon in London.
Proceeds from the loan will be used to finance ongoing exploration, operations, working capital and other general requirements, Rainbow Rare Earths noted, adding that the facility underlines the confidence Bennett has in the Gakara rare earth project in Burundi.
In January, in support of Gakara project, Bennett said: "We are pleased to be able to continue to produce high-grade concentrate from the trial mining operations at Gakara. The fact we are still able to produce high-grade concentrate through our pilot plant underlines the benign mineralogy of our deposit, and bodes well for the design of a much larger bulk mining operation, which is well underway".
By Ife Taiwo; ifetaiwo@alliancenews.com
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Rainbow Rare Earths (RBW)