Key rare earths sector player Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) has secured A$5.5 million in funding through a share placement.
The boost to the coffers involves the issuance of 423 million shares at A$0.013 per share, including a half-million dollar investment from executive chair Brett Lynch.
Innovations in magnet recycling
The funds will be channelled into furthering the company's innovations in magnet recycling technologies and the advancement of its Makuutu ionic adsorption rare earths project in Uganda.
Funds will primarily support enhancements to Ionic Technologies’ Magnet Recycling Demonstration Plant in Belfast, UK, which is producing separated magnet rare earth oxides (REOs).
Additionally, the feasibility study for a full-scale plant, expected by mid-2024, will also benefit from this placement.
Managing director Tim Harrison said: “We have received such a significant amount of interest from various magnet manufacturers, alloy makers and OEMs who are interested in utilising our world-class magnet rare-earth recycling technology for access to secure, sustainable and traceable rare earth supply.
Demand at plant full
“Demand at our operational demonstration plant in Belfast is now full for the next 18 months with potential partner trials advancing to plan.
“Further, our upstream project, the Makuutu Rare Earths Project, is also advancing well with several offtake negotiations with partners who will be evaluating our MREC being produced at the Makuutu demonstration plant.
“We are on the verge of a tangible increase in shareholder value. We greatly appreciate the support of existing shareholders with funding this placement.”
Well-received
The placement was well-received by key existing shareholders, reinforcing strong market confidence in IonicRE's strategic initiatives and technological advancements.
The issue price represents a 25.3% discount to the volume-weighted average price of IonicRE shares over the past 10 trading days, with shares expected to be issued by May 1.
IonicRE is advancing several offtake negotiations through its Makuutu demonstration plant, which is producing mixed rare earth carbonate (MREC).
These negotiations are pivotal as the company moves towards a substantial increase in shareholder value.
The placement also includes an entitlement of three free attaching unlisted options for every four shares issued, with an exercise price of A$0.02 per option.
The exercise was managed by Canaccord Genuity (Australia) Limited and MST Financial Services Pty Limited, who served as joint lead managers.