Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) has raised £7.52mln through a private placement of shares at a significant premium to Friday's closing price.
The new money along with the company's existing cash balance will be used to finance the completion and operation of the Phalaborwa pilot plant, finalise the Phalaborwa definitive feasibility study (DFS) and for general working capital.
Existing shareholders, including TechMet, which contributed £5.54mln, and members of Rainbow's board of directors, participated in the placement of new stock at 10.377p, 28% higher than the last closing price.
George Bennett, Rainbow's chief executive, said: "We are delighted to have received support from various strategic shareholders in Rainbow, including TechMet.
"The funds raised will provide funding beyond the end of Q1 2024, thereby ensuring the delivery and operation of the Phalaborwa pilot plant and the production of the first separated rare earth oxides for testing and marketing purposes."
Brian Menell, chairman and CEO of TechMet, added: "This funding will ensure the completion of the pilot plant, de-risking the Phalaborwa project and the Rainbow investment proposition. It is a validation of the company's proprietary separation technology and its strategy to identify other secondary near-term sources of rare earths globally."