27 September 2023

Rainbow Rare Earths Limited

(“Rainbow” or “the Company”)

LSE: RBW

RAINBOW RARE EARTHS PRIVATE PLACEMENT RAISES £4.5 MILLION

Rainbow Rare Earths (LSE: RBW) is pleased to announce that it has agreed conditionally to issue 30 million new ordinary shares in the Company of no par value each (“Ordinary Shares”) at a price of 15p per Ordinary Share (the “Placing Price”), thereby raising gross proceeds of £4.50 million (the “Placing”). 

The Placing Price represents a 3.2% discount to the closing mid-market share price of 15.5p per Ordinary Share on 26 September 2023.

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The Placing proceeds include:

·    £0.54 million received from existing shareholder Pella Ventures Limited (“Pella”), a family office with a focus on clean technologies and sustainable energy. Pella is a related party on the basis that its founder, Adonis Pouroulis, is also Non-Executive Chairman of Rainbow;

·    £0.63 million received from existing shareholder TechMet Limited (“TechMet”), the private investment company developing world class projects across the critical metals that form the key building blocks for the global energy transition; and

·    £3.33 million received from other investors, including £0.24 million from other members of Rainbow’s Board of Directors and Senior Management.

Of the 30 million Ordinary Shares issued under the Placing, the Ordinary Shares to be issued to Pella are subject to the approval of shareholders at the AGM to be held in November 2023 as set out in more detail below (“Shareholder Approval”).

Reasons for the Placing

The Placing proceeds, which total approximately US$5.5 million, replace the US$5.0 million paid to Bosveld Phosphates (Pty) Limited (“Bosveld”) in July 2023, plus associated fees, to secure an immediate 85% ownership in the Group’s flagship Phalaborwa rare earths project, with an option to acquire the remaining 15%, as announced on 28 June 2023. 

In addition to the Company’s cash balance of US$1.3 million as at 31 August 2023, the Placing proceeds cover the Company’s financing requirements beyond the end of Q1 2024 and will allow for the completion of the Phalaborwa pilot plant operation, which is expected to deliver separated rare earth oxides in Q4 2023, together with general working capital requirements.

George Bennett, CEO, commented:

 “This is an exciting time for the Phalaborwa project, following the milestone production of the mixed rare earth sulphate from the front-end pilot plant in South Africa and with the production of separated rare earth oxides from our back-end pilot plant in the US expected in Q4 2023.

 

“This will be the final de-risking step in order to demonstrate the commerciality of the unique rare earth process flow sheet that Rainbow has developed with its partner K-Technologies, Inc (“K-Tech”) to deliver the separated permanent magnet rare earth oxides vitally needed for the green energy transition. It will also open up the opportunity to apply this intellectual property to other phosphogypsum projects globally, starting with the Uberaba project in Brazil.”

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To read the full news release, please click HERE

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