RareX Limited (ASX: REE) has announced that it has secured a A$50 million Share Subscription Facility (SSF) with GEM Global Yield LLC SCS (GEM), an international investment firm. RareX is an Australian-based rare earth resources company focused on the development of critical minerals projects, including Cummins Range, Australia’s largest undeveloped rare earth project. The funding is structured in two tranches and is aligned with the company’s application for the Mrima Hill project in Kenya.
The initial A$25 million tranche will be made available upon the grant of the Mrima Hill project to the RareX-Iluka consortium. A further A$25 million extension can be sought, contingent upon meeting specific extension conditions. RareX will retain full discretion over the timing and quantum of drawdowns from the facility. The company anticipates that the A$50 million facility will fully fund the consortium’s proposed program for Mrima Hill over the first three years, including the construction of a pilot plant.
Under the terms of the SSF, RareX can request drawdowns by issuing fully paid ordinary shares to GEM or its nominee over a 36-month period. The volume of shares in a drawdown request is limited to 700% of the average daily volume of the preceding 15 trading days. GEM may subscribe for between 50% and 200% of the drawdown request volume. James Durrant, Managing Director & Chief Executive Officer of RareX, stated that the facility provides a flexible source of development capital.
Proceeds from the SSF will be used to advance RareX’s flagship Cummins Range project, progress strategic initiatives including the Iluka-led consortium and Mrima Hill, and provide general working capital to support the Company’s growth. In consideration for entering into the initial tranche of the SSF, RareX will issue 30 million unquoted options with an exercise price of A$0.025, expiring three years from the date of issue, subject to certain vesting conditions.
