Institutional investors are itching to get their foot in the door at RareX after the rare earths producer expanded its Cummins Range deposit in WA into Australia’s largest undeveloped rare earths project this week.

Now the second biggest hard rock rare earths resource in Oz behind Lynas’ Mt Weld, which need we remind you is the largest single deposit of rare earths in the world and only producer of scale outside China, Cummins Range is understandably catching the eye of the smart money.

After lifting its resource by 31% to 519Mt at 0.32% total rare earth oxides and 4.6% phosphate for 1.6Mt TREO and 24Mt phosphate, RareX (ASX:REE) has returned from a trip to the financial markets with $4m from new and existing institutional, sophisticated and professional investors.

It highlights the quality and scale of the Cummins Range resource, with directors and management also throwing more skin in the game with a $500,000 investment on the same terms as the placement, which came in at 4.5c per share.

RareX CEO James Durrant said interest had flown in from near and far.

“The great demand from both offshore and domestic institutions for this equity raising is a strong endorsement of our corporate strategy and testament to the quality of the underpinning resource and the Cummins Range Project more broadly,” he said.

“We are looking forwards to progressing rapidly with the plan to define the project in its 3 stages and accelerate the DSO Stage 1 towards approvals and operations as fast as possible.

“I want to thank the new and existing shareholders for their trust in our team to deliver for them and we welcome the well qualified institutions that have joined the register.”

DSO moving ahead

Following the Canaccord and Bell Potter-led raising, RareX is well placed to complete resource definition drilling at Cummins Range, 130km southwest of Halls Creek in WA’s East Kimberley region, and complete a DFS on a Stage 1 DSO phosphate development.

The funds will also be used to progress a PFS on the full Cummins Range project and provide general working capital.

RareX anticipates starting as a fast-tracked DSO phosphate producer, delivering cashflow quickly with a low-cost simple dig and ship operation before expanding into the production of phosphate concentrate and then finally rare earths concentrate.

Plenty of activity is planned for the rest of 2023, with an updated scoping study incorporating the three-phased start-up expected to be delivered in the June quarter.

Met testwork for all project stages is ongoing with product samples from the programs to be generated progressively over the course of the year, alongside preliminary offtake agreements over the next 12 months and commercial arrangements for mining, hauling, trucking, port and shipping for the first stage DSO development.

Baseline environmental surveys are planned to be completed this year, with negotiations with the Jaru People on a native title agreement also progressing and planned to be signed off by the December quarter.

That will dovetail with the update of the Cummins Range resource to the highest, measured category, and delivery of the Stage 1 DFS by late 2023 or early 2024.

A discount to its previous trading price of 6c and 15 day VWAP of 5.85c, after a significant lift in the developer’s share price since mid-March, the equity raising will also come with a one for two free-attaching option which can be exercised within 24 months at a price of 6.75c.

 

 

 

This article was developed in collaboration with RareX, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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