Rainbow Rare Earths Ltd (LSE:RBW, OTC:RBWRF) rose 14% as the US government-backed TechMet took an option over a key project in South Africa.
TechMet can invest up to US$50 million for a 15-30% stake in the Phalaborwa project, valuing the project between US$151-333 million.
One of TechMet’s major backers is the US agency the Development Finance Corporation, which is looking for projects to supply the States with an alternative source to China for key metals.
George Bennett, Rainbow’s chief executive, said: "We expect Phalaborwa to continue to attract funding, especially from US sources of capital, due to the focus on the critical role of these rare earth metals in the technology-driven industrial and clean energy age."
Shares rose to 15.5p.