Funds To Accelerate Work At Makuutu
Ionic Rare Earths Limited (ASX: IXR) has received firm commitments to raise A$12 million by way of a share placement in a significantly oversubscribed issue. The Placement was strongly supported by both key existing shareholders and new institutional investors.
Managing Director, Tim Harrison, said the Placement significantly strengthens the balance sheet and greatly de-risks the development timeline at the Makuutu Rare Earths Project in Uganda. Canaccord Genuity and Sixty Two Capital Pty Ltd acted as Joint Lead Managers to the Placement.
He added that the strong response reflected the potential of Makuutu as a unique critical and heavy rare earth development opportunity.
“This is another positive milestone for Ionic and our plans to fast track the development of the Makuutu Rare Earths Project,” Mr Harrison said.
“The extremely strong support we have received from institutional and existing shareholders has provided us with the opportunity to secure the required funding to now commit to key activities required to meet our accelerated timelines, as well as move Ionic’s interest from 51% to 60% upon completion of the Feasibility Study.
“We are excited to secure this support from institutional investors at this defining moment of the company’s development.
“Makuutu, we believe, will become an increasingly important strategic asset as the implemented export restrictions in critical and heavy rare earth from China take effect.
“The Chinese dominance in supplying over 95% of the world’s heavy rare earths production comes from their depleting reserves of ionic adsorption clays. Recent policy to prioritise and stockpile critical and heavy rare earths for Chinese domestic supply means less exports. The two factors combined materially increase the value of Makuutu as a long-life, low-capital and high-margin critical and heavy rare earth asset.
“Global rare earth requirements to support investment commitments from world governments in electric vehicles, wind turbines, communications, defence and other technology applications extends well beyond just the supply of the light rare earths NdPr.”
The company intends to use the net proceeds from the Placement to:
- Initiate a RAB drilling programme across the Makuutu Rare Earths Project, including initial drilling on the newly acquired Exploration License 00147;
- Initiate the Phase 2 metallurgical variability testwork across Makuutu to determine overall step change in metallurgical extractions with the optimised conditions;
- Initiate the next stage of site based activities including geotechnical and sterilisation programs for project development;
- Initiate the next stage of Environmental and Social Impact Study (ESIA) at Makuutu, which includes an enhanced community and stakeholder engagement programme; and
- Additional evaluation studies across the Project which has the potential to unlock additional value at Makuutu
