Rainbow Rare Earths, has entered into a cooperation agreement with TechMet Limited to fund a definitive feasibility study (DFS) for downstream rare earth separation.
Rainbow Rare Earths (LSE:RBW), has entered into a cooperation agreement with TechMet Limited to fund a definitive feasibility study (DFS) for downstream rare earth separation. Additionally, TechMet has also agreed to subscribe US$0.50 million for new ordinary shares alongside a proposed placing by way of an accelerated bookbuild to raise approximately US$2 million at a price of not less than 12p per ordinary share.
As quoted from the press release:
- Cooperation agreement entered into with TechMet by which the parties intend to form a joint venture that will undertake a DFS focused on a downstream rare earth separation business capable of processing Rainbow’s high grade rare earth concentrate;
- Under the terms of the cooperation agreement, after completion of an initial scoping exercise, TechMet will fund the full costs of the DFS on a reimbursable carry basis up to US$3.0 million;
- In addition TechMet has agreed to subscribe US$0.5m for new ordinary shares;
- The TechMet Subscription Shares will be subject to a 12 month lock-in;
- Alongside the TechMet Subscription, the company intends to raise further proceeds of approximately US$1.5 million (before expenses) through a placing of new ordinary shares arranged by Arden Partners plc with new and existing investors at a price of not less than 12p per ordinary share;
- It is the intention of certain of the directors of Rainbow to subscribe for approximately US$0.6 million in the placing
“We are extremely pleased to have entered into this cooperation agreement, recognizing the potential positive financial impact it may have on the company given the much higher selling prices for processed rare earths compared to the mixed concentrate that Rainbow currently sells. A fully funded DFS is very much in line with our strategy to extend our operations “downstream”,” said Martin Eales, CEO of Rainbow.