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Highlights

  • GEM to provide AUD 50 million in two tranches contingent on Mrima Hill project grant.
  • Facility allows RareX discretionary drawdowns over 36 months for project advancement.
  • Initial tranche includes 30 million unquoted options and AUD 500,000 facility fee.

RareX Limited (ASX:REE) focuses on rare earths, gallium, niobium, and scandium, with key projects including Cummins Range, Mt Mansbridge, and Khaleesi. The company has informed that it has entered into a Share Subscription Facility (SSF) agreement with GEM Global Yield LLC SCS (GEM) to secure funding of up to AUD 50 million over a 36-month period. The facility is structured in two tranches: an initial AUD 25 million available upon the grant of the Mrima Hill project, with a further AUD 25 million extension possible if requested and conditions are met. The funding is contingent upon the Mrima Hill project being granted to the RareX-Iluka consortium, which is currently under review by Kenya’s NAMICO.

Flexible Drawdown Terms
The SSF provides RareX with flexibility and discretion over the timing and amount of drawdowns. Funds will be made available through the issuance of shares to GEM or its nominee. Drawdowns are limited by the company’s average daily trading volumes, and shares will be issued at 90% of the average VWAP over a 15-trading-day drawdown pricing period. RareX may also set a minimum drawdown price and must maintain sufficient placement capacity or obtain shareholder approval.

Use of Funds and Initial Tranche Terms
Proceeds from the facility are intended to support the advancement of RareX’s Mrima Hill rare earths and phosphate project in Kenya, including the consortium’s proposed Year 1-3 work program, the Cummins Range project in Australia, and general working capital. As part of the initial tranche, RareX will issue 30 million unquoted options with an exercise price of AUD 0.025, three years expiry. Half of the options vest upon satisfaction of the Mrima Hill Condition, with the remainder immediately exercisable. GEM will also receive a facility fee of AUD 500,000, payable in two instalments following the grant of a prospecting licence for Mrima Hill.

Management Comment
James Durrant, Managing Director & CEO of RareX, stated: “This facility provides RareX with a flexible source of development capital. We are excited to be partnering with GEM who bring more than just funding support, but deep US government relationships. The facility will help accelerate the development of Mrima Hill if the consortium proposal is successful.”

Share Performance

The company is currently trading at AUD 0.022, matching its previous close. The company has 1,000,164,017 shares on issue, giving it a market capitalisation of approximately AUD 22.00 million.