RareX (ASX:REE) has secured a $50 million share subscription facility from international investment firm GEM as part of the group’s bid to procure the Mrima Hill Project in Kenya.
On the grant of Mrima Hill’s application, RareX will secure $25 million, with a further $25 million available if extension conditions are met.
To enter the initial trance of the facility, GEM will be issued 30 million options exercisable at $0.025 and to expire three years from the issue date.
Subject to attaining a prospecting licence for the project, RareX will vest another 15 million options, while also paying a facility fee of $500,000 to GEM Yield Bahamas in two installments, six and 12 months after receiving the licence.
The company is in a consortium with Iluka Resources (ASX:ILU) to develop the Mrima Hill Project over a 36 month period, with funds retained from this facility expected to cover all costs including the development of a pilot plant.
Kenya’s NAMICO is currently reviewing RareX’s proposal for the Mrima Hills Project.
Proceeds will also be used to advance the Cummins Range Project in the Kimberley region of Western Australia, while also processing other strategic initiatives outside of Mrima Hill.
CEO James Durrant says the facility will allow RareX a “flexible source” of capital for development activities.
“We are excited to be partnering with GEM who bring more than just funding support, but deep US government relationships,” Durrant says.
“The facility will help accelerate the development of Mrima Hill if the consortium proposal is successful.”
RareX is a rare earths explorer focused on discovering & developing carbonatites to push the global clean energy revolution.
Write to Maddison Elliott at Mining.com.au
Images: RareX
