- Ionic Rare Earths (IXR) is set to raise $12 million to develop its Makuutu Rare Earths Project in Uganda
- All up, 300 million shares will be issued at 4 cents each — representing 7 per cent discount to the 10-day volume-weighted average price (VWAP)
- The funds will be used to conduct drilling, studies, and an updated mineral resource estimate for the rare earths project
- Ionic has a 51 per cent stake in Makuutu but will increase this to 60 per cent once a feasibility study is completed next year
- Company shares are up 2.22 per cent and are trading for 4.6 cents
Ionic Rare Earths (IXR) is set to raise $12 million to develop its Makuutu Rare Earths Project in Uganda.
The rare earths explorer came out of a trading halt this morning while it planned the $12 million placement.
All up, 300 million fully paid ordinary shares will be issued to institutional and sophisticated investors at 4 cents per share. This represents a 7 per cent discount to the 10-day volume-weighted average price (VWAP) and a 12.7 per cent premium to the 30-day VWAP.
Once received, the funds will strengthen IXR’s balance sheet and enable it to accelerate work programs at its rare earths project. Work will include drilling, environmental and evaluation studies and a revised mineral resource estimate.
“The extremely strong support we have received from institutional and existing shareholders has provided us with the opportunity to secure the required funding to now commit to key activities required to meet our accelerated timelines, as well as move our interest from 51 to 60 per cent upon completion of the feasibility study,” Managing Director Tim Harrison said.
Ionic Rare Earths’ current 51 per cent interest in the project will increase to 60 per cent once it completes a feasibility study by October 2022. This is part of an earn-in agreement with Rare Earth Elements Africa and Ugandan Partners.
According to the ASX-lister, the Makuutu project is positioned as a highly strategic global asset amid export restrictions from China — the world’s largest supplier of heavy rare earths production.
However, China is looking to restrict rare earth exports to prioritise domestic supply. This strategically positions Makuutu as a significant, long-life and low-capital critical and heavy rare earth asset.
The upcoming drilling program will start late next month and include 60 holes to test for ionic adsorption clay mineralisation.
Company shares are up 2.22 per cent and are trading for 4.6 cents at 10:57 am AEDT.