Rainbow Rare Earths Ltd (LON:RBW) has signed a cooperation agreement with TechMet Limited to fund a Definitive Feasibility Study (DFS) for downstream rare earth separation.
The rare earth metals miner said it would form a joint venture with TechMet to undertake the DFS, which would be fully funded by TechMe, following an initial scoping exercise on a reimbursable carry basis of up to US$3mln.
TechMet has also agreed to subscribe for US$500,000 in new ordinary shares, which would be subject to a 12-month lock-in.
In addition to the TechMet subscription, the firm also said it intended to raise further proceeds of around US$1.5mln through a placing of new shares at a price of 12p per share, a 3% discount to the company’s last closing price of 12.3p.
Rainbow said the proceeds of the combined capital raising would be used to develop its Murambi mining area, which is due to commence production in the fourth quarter of 2018, in addition to the exploration and development of Gomvyi, its third mining area.
-- Adds details of share placing --