Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) has secured A$2 million in funding from its newly appointed executive chairman Brett Lynch and sophisticated investors to advance its Makuutu Rare Earths Project in Uganda and the magnet recycling facility operated by UK subsidiary Ionic Technologies in Belfast, Northern Ireland.
The funds were raised through a share placement at A$0.018 per share, which was the last transacted price on January 23.
IonicRe shares are currently trading at about A$0.02, up 5.26%.
Lynch, who was appointed on January 24, has demonstrated his confidence in the company and is set to invest about $1.5 million in the form of 83 million fully paid ordinary shares.
However, his investment requires the approval of shareholders, which will be sought at an upcoming meeting.
READ: Ionic Rare Earths appoints new executive chair to oversee strategic direction
In addition to Lynch's commitment, the company has also received binding commitments from existing sophisticated investors to raise an additional $500,000.
They will be issued about 28 million shares, also at the same $0.018 per share price.
Excluding the shares to be issued to Lynch, the remaining shares under the placement will utilise the company's existing placement capacity and are expected to be issued by Wednesday.
Financial boost
“The funds raised from this placement are earmarked for enhancing the company's working capital,” a statement from the company read.
“They will also support the advancement of IonicRE's key projects, including the development of the magnet recycling facility in Belfast, Northern Ireland, and the Makuutu Rare Earths Project in Uganda.
“This financial boost is poised to bolster the company's operations and strategic initiatives in the rare earths sector.”
As well as providing working capital, the funds will advance demonstration plant activities at both the magnet recycling facility and the Makuutu Rare Earths Project.