Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) has raised £4.5 million through a private placing at a minimal discount to the last closing price.
Shares were issued at 15p, a 3% discount, with existing shareholder Pella Ventures, a party related to chairman Adonis Pouroulis, subscribing for £0.54 million worth.
Another existing investor, TechMet, put in £0.63 million with the remaining £3.33 million received from other investors, including £0.24 million from Rainbow’s directors and senior management.
Standard market-listed Rainbow said the money raised replaces the US$5 million to Bosveld Phosphates for immediate 85% ownership of its flagship Phalaborwa rare earths project plus will allow for the completion of the project's pilot plant operation.
George Bennett, Rainbow’s chief executive, said production of separated rare earth oxides from the back-end pilot plant in the US is still expected to start within the next three months.
“This will be the final de-risking step in order to demonstrate the commerciality of the unique rare earth process flow sheet that Rainbow has developed with its partner K-Technologies.”