Rainbow Rare Earths, a mining company specializing in rare earth minerals, announced its plan to raise £4.5 million through a discount share placing. This comes after the company increased its stake in the Phalaborwa rare earths project in South Africa.
The funds will be raised by placing 30 million new shares in the company at a price of 15 pence each, which represents a 3.2% discount from the previous day's closing price.
These funds will primarily be used to replace the $5 million that was paid to Bosveld Phosphates in July, thereby ensuring Rainbow Rare Earths' immediate ownership of 85% of the Phalaborwa project. Moreover, the company has an option to acquire the remaining 15%.
In addition to securing ownership, the funds raised will also cater to the company's financing needs beyond the first quarter of next year. This will enable Rainbow Rare Earths to successfully complete the Phalaborwa pilot plant operation. The project is expected to deliver separated rare earth oxides by the fourth quarter of this year.
