LONDON (Alliance News) - Rainbow Rare Earths Ltd on Wednesday raised USD2.0 million through a share placing as it agreed with TechMet Ltd to fund a definitive feasibility study for downstream rare earth separation.
The mining company issued 13.1 million shares at a price of 12.00 pence per share, worth GBP1.6 million. The stock was trading 3.0% lower on Wednesday at 12.00p per share. The placing was arranged by Arden Partners PLC.
After admission to trading - expected on August 16 - Rainbow will have 187.9 million shares outstanding.
Earlier on Wednesday, Rainbow explained the proceeds will be used to fund the mining development at Murambi, Rwanda, where the production is due to start in the final quarter of 2018. The company also intends to cover expenses associated with exploration & development of Gomvyi, Burundi.
Under the agreement, TechMet agreed to subscribe for USD500,000 million in shares. Both parties will form a joint venture that will undertake a definitive feasibility study focused on a downstream rare earth separation business capable of processing Rainbow's high grade rare earth concentrate.
"We are extremely pleased to have entered into this cooperation agreement, recognising the potential positive financial impact it may have on the company," said Rainbow Chief Executive Martin Eales.
"The opportunity for our company to invest in its [Rainbow] development, and specifically to jointly explore processing opportunities, is of considerable strategic value to TechMet as we expand our portfolio," added TechMet Chief Executive & Chairman Brian Menell.
Rainbow Rare Earths (RBW)