Rainbow Rare Earths has secured a new US$0.7 million funding agreement with major shareholder, Pella Ventures Limited to develop its project.
Critical metals company Rainbow Rare Earths (LSE:RBW) has secured a new funding agreement with major shareholder, Pella Ventures Limited. Rainbow will use the US$0.7 million to support its development and operations.
As quoted from the press release:
In addition, Rainbow has agreed with The Lind Partners to suspend any further tranches under the existing equity draw down facility (‘the Lind Facility’) first announced on 28 January 2019.
Further, the company is pleased to provide a corporate update together with its latest quarterly production statistics for its Gakara Project in Burundi for the period January to March 2019.
Terms of the Unsecured Loan
Loan Amount: US$700,000
Loan Term: 12 months
Interest: 15 percent
Equity: Mandatory conversion of outstanding loan principal and any interest into ordinary shares of the Company on same terms of next equity fundraising.
Purpose: To be applied towards general working capital purposes.
Martin Eales, CEO of Rainbow, said: “The funding agreement with Pella provides working capital whilst the company finalises its short term plans to finance the company’s planned investment for growth. Pella is the company’s founder and largest shareholder and is committed to supporting the company to achieve its long term aims.
He continued: “Our project is exceptional and is one of the highest-grade mines of its type in the world. We have been working hard at developing a short-term strategy to: (i) maximise concentrate production from the high grade veins through the acquisition of new fit-for-purpose mining vehicles and the development of multiple mining areas; (ii) develop the upside potential of the large lower-grade Resource at Kiyenzi for future mining; and (iii) progress our investigation into the feasibility of further processing our concentrate, in order to significantly increase our economic participation in the rare earth value chain in the future.”