logo-loader
MiningGeneral mining & base metals
Rainbow Rare Earths Limited

Rainbow raises US$7.75mln of new financing facilities in place

The new money will provide funding flexibility as Rainbow moves into its next phase of development

1548662624_DJI_0816_resized.jpg
The Gakara mine in Burundi

Rainbow Rare Earths LTD (LON:RBW) is raising up to US$7.75mln through a combination of a US$750,000 unsecured convertible security and a 24-month equity facility of up to US$7.0 mln.

The counterparty is an entity managed by The Lind Partners LLC. 

WATCH: Rainbow Rare Earths publishes maiden JORC resource for Gakara

There will be an immediate initial share subscription of US$100,000, meaning gross initial funds of US$850,000 will be advanced to Rainbow within five business days. 

The structure is tailored to provide maximum flexibility for Rainbow's capital requirements during 2019 as production increases, expressly allowing other financing options and the right to pause or terminate the agreement at minimal or no cost

The funding agreement provides Rainbow with the certainty of a base level of funding, as may be required, over 24 months

"We believe that this agreement with Lind provides the company with maximum certainty of funds whilst retaining sufficient flexibility to minimise dilution of shareholders where possible,” said chief executive Martin Eales.

“It is an adaptable financing solution well suited to Rainbow, as we seek to increase production from existing mining sites and develop new areas."

The unsecured convertible security amount of US$750,000 has a two-year term and carries no coupon.

It is convertible into shares at a face value of US$900,000 after a minimum of four months from the date of the agreement. The conversion price will be the lower of 5.28p, being 130% of the 20-day VWAP prior to this announcement, or a 10% discount to the average of the five consecutive daily VWAPs chosen by Lind during the 20 trading days prior to conversion. 

The company has the right to settle any conversions in cash in lieu of Ordinary Shares and, at any time, repay the convertible security amount in full for cash, subject to Lind retaining the option to convert up to a maximum of 33% of the convertible security amount at such time.

 

 

Quick facts: Rainbow Rare Earths Limited

Price: £0.03

Market: LSE
Market Cap: £10.84 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Rainbow Rare Earths Limited named herein, including the promotion by the Company of Rainbow Rare Earths Limited in any Content on the Site, the...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Rainbow Rare Earths looks to open second mining area in fourth quarter

Martin Eales, chief executive of Rainbow Rare Earths LTD (LON:RBW), tells Proactive Investors they sold 350 tonnes of concentrate in the three months to the end of June 2018 - up significantly from the 125 tonnes sold in the previous quarter - as the ramp-up to full production continues at...

on 24/7/18

2 min read