Lindian Resources Ltd (ASX:LIN) is now fully funded to accelerate development of its Kangankunde Rare Earth Mining Project in Malawi after receiving commitments totalling $16 million from new and existing investors under a placement exercise.
The exploration company will issue about 76.19 million shares at $0.21 each to the investors, which include a number of new institutions, and to Lindian’s executive chairman Asimwe Kabunga, who will subscribe for $0.575 million worth of the shares.
“We are grateful to our new and existing investors for their support for this placement, which was heavily bid. It reflects investors’ recognition that Kangankunde has all the hallmarks of a globally-significant rare earths project of considerable scale and grade,” Kabunga said.
“I am also pleased to confirm that we have secured funding from a number of respected institutional investors, both domestic and offshore, which strengthens the quality of Lindian’s register. Lindian is now comfortably funded to unlock considerable value as our drilling ramps up and with first assays pending.”
Crucial support
The first part of the placement will involve 73,452,381 shares and about 36,726,191 options, exercisable at $0.30 each, on the basis of one option for every two shares subscribed for. The options will expire three years from the date of issue.
Another 2,738,095 shares and 1,369,048 options will be issued to chairman Kabunga, subject to shareholders’ approval.
The placement is a key milestone for Lindian as it facilitates the early payment of the next US$7.5 million tranche due in late January 2023, to progressively acquire 100% of Rift Valley Resource Developments Ltd, which holds 100% of Kangankunde.
The balance of funds raised will be used to accelerate the project’s ongoing drilling program, for general working capital purposes, and to defray the cost of the placement.
Drilling to accelerate
“Lindian has made excellent progress in Malawi with the government, the community and with mine development drilling that is progressing as planned,” Lindian chief executive officer Alistair Stephens said.
“This funding allows us to comfortably accelerate drilling, which will now continue through the wet season using two tracked mounted rigs on site and two additional rigs available in areas not impacted by weather. First assays are due later this month and they will be a pivotal point for the company which we look forward to with much anticipation,” he added.