Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) has received firm commitments to raise $1.65 million in a share placement, offering more than 235 million shares at $0.007 each, and has launched a security purchase plan (SPP) to raise up to $500,000.
The placement was strongly supported by key existing sophisticated and institutional investors and the placement price represents a 22% discount to the company's closing price of 0.9 cents per share on November 21, 2024, and a 26.4% discount to the company’s 5-day VWAP of 0.95 cents.
This additional capital will support funding arrangement activities for the company’s Belfast magnet recycling project and to advance the Viridion rare earth refining and recycling joint venture (JV) in Brazil.
Director confidence
Company directors have demonstrated their confidence in the company by committing $202,000 to participate in the placement, subject to shareholder approval at an extraordinary general meeting to be held early in 2025.
For every two placement shares subscribed for, the subscriber is also entitled to one option. The 117,857,141 options issued will have an exercise price of $0.011 each and an expiry date of December 15, 2027.
SPP
In addition to the placement, the company will offer eligible existing shareholders with a registered address in Australia or New Zealand who were holders of Shares at 7:00 pm (AEST) on Monday, November 25, 2024, the opportunity to apply for new shares via a non-underwritten SPP, without incurring brokerage fees.
For every two SPP shares subscribed for, the subscriber is also entitled to one option exercisable at 1.1 cents by December 15, 2027.
The company is seeking $500,000 (before costs) under the SPP at the same price as the placement of $0.007 per share.
Eligible shareholders will have the opportunity to apply for up to $30,000 worth of shares and shares issued under the SPP will rank equally with the company’s existing shares.
MST Financial Services Pty Limited and GBA Capital Pty Ltd are acting as joint lead managers and bookrunners to the placement on a best endeavour basis.
Rare earths and magnet recycling
Ionic Rare Earths is advancing two core material recycling projects: the Belfast Ionic Technologies magnet recycling project and a JV with Viridis Mining and Minerals Ltd (ASX:VMM) to build a rare earth separation business in Brazil.
The JV plans to construct a refinery and magnet recycling facility in Brazil using Ionic Technologies’ separation technology, which has already been tested at the company's Belfast magnet recycling Demonstration Plant.
Read: Ionic Rare Earths JV inks MoU with owner of first rare earth magnet lab in South America
The company recently fielded a feasibility study for its Belfast operation that highlights a post-tax net present value (NPV) of US$502 million (A$776 million), a 43.6% internal rate of return (IRR) and a capital payback period of just 2.4 years.