- Australian Rare Earths (AR3) taps investors for $11.1 million to fast-track activity at its Koppamurra rare earth mineral project in South Australia and Victoria
- AR3 received bids “well in excess” of the placement capacity, requiring a scale back of applications
- The company secured firm commitments for a placement of 24.6 million new fully paid ordinary shares at a price of 45 cents apiece to institutional and sophisticated investors, directors and management
- The first tranche of shares is expected to be issued on May 1
- Shares in AR3 closed almost 20 per cent lower on Friday afternoon
Australian Rare Earths (AR3) has tapped investors for $11.1 million to fast-track activity at its Koppamurra rare earth mineral project in South Australia and Victoria.
AR3 said it received bids “well in excess” of the placement capacity, requiring a scale back of applications.
The company received firm commitments for a placement of 24.6 million new fully paid ordinary shares at a price of 45 cents apiece to institutional and sophisticated investors, directors, and management. The issue price marks a 14.5 per cent discount to the 15-day VWAP of 52 cents.
The shares will be released to investors in two tranches. The first, worth around $10.65 million, will go to investors, with the second to raise $400,000 to directors and management.
Placement participants will also receive a free attaching unlisted option on a one-for-three basis, exercisable at 57 cents, with a two-year expiry. This could potentially raise a further $4.7 million if all placement options are exercised.
The company said proceeds from the placement will go towards further resource definition drilling, metallurgical test work, and further evaluation of downstream processing options at the Koppamurra ionic clay-hosted rare earth deposit.
“This placement gives the company the balance sheet strength to continue the rapid progression of activity at Koppamurra,” AR3 Acting Managing Director Rick Pobjoy said.
“We are encouraged by the market’s endorsement of Koppamurra’s potential, as demonstrated by the strong volume of bids received from global and domestic institutions and appreciate the continued support of our loyal existing major shareholders.”
The first tranche of shares is expected to be issued on May 1.
Shares in AR3 closed 19.5 per cent lower on Friday afternoon.