Ionic Rare Earths in US $25m placement for Makuutu project

Listed explorer Ionic Rare Earths is seeking from investors US $25 million to fund exploration at its Ugandan project Makuutu.

The firm is focused on developing its flagship Makuutu Rare Earths Project into a significant long life, low-cost, supplier of high-value critical and heavy rare earths. Makuutu is an advanced-stage, ionic adsorption clay-hosted project highlighted by near-surface mineralisation, significant exploration upside, excellent metallurgical characteristics and access to tier-one infrastructure.

Working capital

The placement was priced at 7.4¢ a share, a 10% discount to Ionic’s last traded priced as well as the 10-day volume weighted average price. The term sheet said the placement had room for $5 million in over subscriptions. Potential investors were told Ionic was building a vertically integrated rare earth company. And the money raised would primarily go towards its Makuutu rare earths project in Uganda, where Ionic was exploring for JORC resource growth and needed to complete a feasibility study to apply for a mining licence.

The placement’s proceeds would also be used for working capital and to speed the development and commercialisation of rare earth separation and magnet recycling technologies that Ionic got via its acquisition of Seren Technologies.

The company had $280 million market capitalisation before the offer. It had $7.2 million cash at December end. Rare Earths is set to play a critical role in the future of clean energy. Rare Earths are a key ingredient in the permanent magnets found in wind turbines and electric vehicles.

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