Rainbow Rare Earths Limited (LON:RBW) has raised £2.8mln to help fund the ramp-up of operations at its producing Gakara rare earth project in Burundi.
The junior miner sold 200,000 shares at 14p apiece – slightly below yesterday’s closing price of 15.25p.
Rainbow said the cash injection will fast-track the development of new mining areas at Gakara, fund the purchase of additional mining equipment as well as a new drilling campaign, while it will also strengthen the balance sheet during the sales ramp-up.
The first high-grade rare earths mineral concentrate from Gakara was shipped last week, making Rainbow the only producing rare earths mine in Africa.
Boss “delighted” with strong support
“We are delighted with the strong support that we have received for this fundraising exercise, and we are pleased to welcome a number of new institutional shareholders to the register,” said chief executive Martin Eales.
“2017 has been a transformational year for us as we delivered on our overarching objective achieving first production and sales of rare earth concentrate from Gakara within 11 months.
“Looking now to 2018, our focus will increasingly include the development of new areas of mineralisation, and the identification of future sources of ore to ensure we have a long-term, sustainable mine producing high grade concentrate from multiple open pit operations.
He added: “We have already begun this process, reporting significant exploration upside at Gakara through a recently completed airborne magnetic survey, and utilising these new funds, we will be able to implement a drilling campaign on these exciting anomalies in addition to accelerating our productions plans.”
Shares fell 7.8% to 14.1p on Tuesday.
--Updates for completion of placing, CEO comment and share price--