Rift Valley Resources Ltd (ASX:RVY) will use $1.5 million in placement funds for exploration of its projects in Angola, including the flagship Longonjo Metal Magnet Project.
The company has received firm commitments for the placement from institutional and sophisticated investors.
The placement comprises 50 million shares at a price of $0.03.
Stephen Dobson, executive chairman, said: “We are delighted with the continued support shown by our existing shareholders and welcome new high quality investors to the register for the ongoing development of the assets in Angola.”
READ: Rift Valley Resources reveals maiden resource for Longonjo Magnet Metals Project in Angola
Rift Valley plans infill drilling at the 70%-owned Longonjo project to upgrade the maiden inferred resource estimate.
The combined inferred resource is 44.7 million tonnes at 2.50% total rare-earth oxides (TREO).
This includes a from-surface resource of 11.6 million tonnes at 4.30% TREO oxide ore.
Mineralisation open in all directions
The resource is expected to be just the beginning, with mineralisation open in all directions and at depth.
Only part of the prospective rare earth soil anomaly has been tested to date.
The project has potential to produce high purity rare earth products with a strong emphasis on the magnet metals neodymium and praseodymium.
READ: Rift Valley Resources reveals positive initial study results for rare earth project
The company also plans to complete a scoping study for the Longonjo project.
Initial results have been positive and indicate that weathered zone resources may be mined from a conventional shallow open pit.
There is “free dig” material and a very low waste to resource strip ratio.
The study by international mining consultant Amec Foster Wheeler PLC (LON:AMFW) justifies further development work and studies.
Rift Valley has already developed a conceptual process flowsheet to produce high purity, separated rare earth products.
Drilling to continue at Cassenha Hill
The placement funds will also enable Rift Valley to continue drilling at the Cassenha Hill Copper Prospect and to further explore the Bongo Gold Project.
Longonjo and Cassenha Hill are within the 3,760 square kilometre greater Ozango Project.
Angola remains a very supportive jurisdiction for mining, and is one of Africa’s largest oil producers, and the world’s fifth largest diamond producer (by value).
Rift Valley has also advanced negotiations regarding the sale of its gold properties in Tanzania.
The board is confident of a successful outcome which will bring further capital to fund the Angolan exploration activities.
Demand for magnet metals
The demand neodymium and praseodymium (NdPr) is predicted to surge as a result of their increasing application in high powered permanent magnets, or neodymium-iron-boron magnets.
These magnets are important components of the motors for hybrid and electric vehicles as well as the turbines for green energy wind farms.
They already used in major EV models such as the Nissan LEAF, Chevrolet Bolt and BMW i3.
Demand is expected to grow further as Tesla (NASDAQ:TSLA) decided to change the motor in the Model 3 RWD Long Range model to a 3-phase NdPr permanent magnet motor.