TIDMRBW
RNS Number : 8607O
Rainbow Rare Earths Limited
13 October 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED UNDER
THE MARKET ABUSE REGULATION (EU) NO. 596/2014, AS AMED AS IT FORMS
PART OF UK LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018,
(MAR), IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF
SECURITIES IN ANY JURISDICTION THIS ANNOUNCEMENT AND THE
INFORMATION IN IT, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED
STATES, AUSTRALIA, CANADA, NEW ZEALAND, JAPAN, THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT
CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW OR
REGULATION.
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES.
FOR IMMEDIATE RELEASE
Rainbow Rare Earths Limited
("Rainbow" or the "Company")
(LSE: RBW)
13 October 2021
Placing of new Ordinary Shares raises GBP6.435 million at 15p
per share
Rainbow is pleased to announce that it has agreed to
conditionally issue 42,900,000 new ordinary shares in the Company
of no par value each ("Ordinary Shares") at a price of 15p per
Ordinary Share (the "Placing Price"), thereby raising gross
proceeds of GBP6.435 million (the "Placing"). The Placing Price
represents a 3.4% premium to the closing mid-market share price of
14.5p per Ordinary Share on 11 October 2021 when the Placing Price
was agreed.
The 42,900,000 Ordinary Shares to be issued at the Placing Price
includes :
-- GBP2.250 million received from TechMet Limited ("TechMet")
via a direct subscription with the Company ("TechMet
Subscription"). TechMet is a private industrial company that is
building strategic positions in world-class projects across the
technology metals supply chain. The U.S. International Development
Finance Corporation, an agency of the U.S. government that invests
in overseas development projects, is a major investor in
TechMet.
-- GBP4.185 million received from other investors, including global institutional investors.
Reasons for the Placing
The Placing proceeds, which total approximately US$8.5 million,
net of estimated costs totalling US$0.3 million, will be used as
follows:
-- US$0.5 million to complete work for the Phalaborwa
preliminary economic assessment ("PEA"), expected in H2 2021.
-- US$3.0 million for further technical work at Phalaborwa
beyond the PEA to work towards a bankable feasibility study,
excluding on site pilot testing of the final processing
flowsheet.
-- Up to US$1.0 million for the Gakara Project in Burundi.
Subject to the approval of the Government of Burundi, concentrate
with an estimated sale value of US$1.3 million is available to fund
the recommencement of trial mining and processing operations at
Gakara, and there is therefore no intention to keep the operation
on care and maintenance. However, a maximum of US$1.0 million of
the Placing proceeds will be used for working capital to maintain
Gakara on care and maintenance until December 2022, if
required.
-- US$1.0 million to allow repayment of the balance of an
unsecured loan, including accrued interest of US$0.1 million,
received in February 2020 from Pipestone Capital Inc ("Pipestone"),
of which George Bennett (Rainbow's CEO) is the ultimate beneficiary
. Under the terms of the Pipestone loan agreement, the loan is
repayable following the Placing and it is anticipated that
repayment will occur in November 2021 following receipt of the
proceeds of the Placing and the renewal of the Company's
authorisation to issue new Ordinary Shares at its Annual General
Meeting to be held on 17 November 2021 ("AGM"). Pipestone can
elect, at its sole discretion, to require all or part of the loan
to be settled in Ordinary Shares at the Placing Price, which may
require the Company to issue up to 5.2 million additional shares
after the AGM.
-- US$3.0 million for general working capital purposes.
Of the 42,900,000 Ordinary Shares issued under the Placing,
10,000,000 Ordinary Shares to be issued to TechMet under the
TechMet Subscription are subject to the approval of shareholders at
the AGM to be held on 17 November 2021 as set out in more detail
below ("Shareholder Approval").
George Bennett, Chief Executive Officer of Rainbow, said:
"We are very encouraged by the strong support we have received
from both existing and new institutional shareholders in the
Placing, which was significantly over-subscribed. With its
stringent investment criteria and its goal to secure the critical
metals for the global technology revolution, we welcome the
substantial investment by TechMet, which counts the U.S. government
as a major investor.
We believe that demand for rare earths required in permanent
magnets is poised for continued strong growth, as evidenced by the
85% increase in the price of both Neodymium and Praseodymium oxide
between November 2020 and September 2021. With our diversified
asset portfolio, which includes the exciting near-term growth
opportunity presented by the Phalaborwa Project in South Africa,
Rainbow is uniquely positioned to deliver into this growing market.
The preliminary economic assessment at Phalaborwa is expected to be
completed shortly and we believe it will serve to demonstrate the
exceptional quality and favourable characteristics of this rare
earths project."
Participation of the Directors
At 13 October 2021 the Company remains in a closed period ahead
of publication of the Annual Report for the year ended 30 June
2021, expected to be announced in October 2021. Accordingly, the
Company's Directors have not been permitted to participate in the
Placing.
Total voting rights and Admission
An application has been made for the initial 32,900,000 Ordinary
Shares issued pursuant to the Placing (the "Unconditional Shares")
to be admitted to the Official List (by way of a Standard Listing)
and to trading on the London Stock Exchange Plc's Main Market for
listed securities ("First Admission"). It is expected that First
Admission will become effective and that dealing in the
Unconditional Shares will commence on or around 18 October 2021.
The Unconditional Shares will rank pari passu with the existing
Ordinary Shares. Following Admission of the Unconditional Shares,
the Company will have 511,811,434 Ordinary Shares in issue.
The issue of a further 10,000,000 Ordinary Shares pursuant to
the TechMet Subscription (the "Conditional Shares") is subject to
Shareholder Approval. It is expected that admission of the
Conditional Shares will become effective and that dealing in the
Conditional Shares will commence on or around 22 November 2021
("Second Admission") following the AGM. The Conditional Shares will
rank pari passu with the existing Ordinary Shares.
Following the First Admission and prior to the AGM and the issue
of the Conditional Shares, the above figures of 511,811,434
Ordinary Shares may be used by shareholders as the denominator for
the calculations by which they will determine if they are required
to notify their interest in, or a change to their interest in, the
Company under the FCA's Disclosure, Guidance and Transparency
Rules.
IMPORTANT NOTICES
This announcement includes "forward looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, or any statements proceeded by,
followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward looking statements. Such forward looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. Except as required by the
FCA, the London Stock Exchange or applicable law (including as may
be required by the Listing Rules, the Prospectus Regulation, the
Prospectus Rules, MAR and the Disclosure Guidance and Transparency
Rules), the Company expressly disclaims any obligation or
undertaking to disseminate or release publicly any updates or
revisions to any forward looking statements contained in this
announcement to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statements are based.
MARKET ABUSE REGULATION
Market soundings, as defined in MAR, were taken in respect of
the Placing, with the result that certain persons became aware of
inside information, as permitted by MAR. That inside information is
set out in this announcement and has been disclosed as soon as
possible in accordance with paragraph 7 of article 17 of MAR.
Therefore, those persons that received inside information in a
market sounding are no longer in possession of inside information
relating to the Company and its securities.
**S**
For further information, please contact
Rainbow Rare Earths George Bennett +27 82 652 8526
Ltd Company Pete Gardner +44 (0) 771 779 4251
SP Angel Corporate Ewan Leggat
Finance LLP Broker Charlie Bouverat +44 (0) 20 3470 0470
--------- ------------------- --------------------------------------
Flagstaff Strategic Tim Thompson +44 (0) 207 129 1474
and Investor Communications Fergus Mellon rainbowrareearths@flagstaffcomms.com
------------------ --------------------------------------
Notes to Editors:
Rainbow's strategy is to become a globally-significant producer
of rare earth metals. Nd/Pr are vital components of the strongest
permanent magnets used for the motors and turbines driving the
green technology revolution. Analysts are predicting demand for
magnet rare earth oxides will grow substantially over the coming
years, driven by increasing adoption of green technology, pushing
the overall market for Nd/Pr into deficit.
The Phalaborwa Rare Earths Project, located in South Africa,
comprises an Inferred Mineral Resource Estimate of 38.3Mt at 0.43%
total rare earths oxides ("TREO") contained within gypsum tailings
stacked in unconsolidated dumps derived from historic phosphate
hard rock mining. High value Nd/Pr oxide represent 29.1% of the
total contained rare earth oxides, with economic Dysprosium and
Terbium oxide credits enhancing the overall value of the rare earth
basket contained in the stacks. The rare earths are contained in
chemical form in the gypsum dumps, which is expected to deliver a
higher-value rare earth carbonate, with lower operating costs than
a typical rare earth mineral project.
The Company's Gakara Project in Burundi has produced one of the
highest-grade concentrates in the world (typically 54% TREO)
through trial mining operations. The Gakara basket is weighted
heavily towards Nd/Pr, which account for over approximately 19.5%
of the contained TREO and 85% of the value of the concentrate.
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END
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October 13, 2021 02:00 ET (06:00 GMT)
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