Money talks: RareX secures $10m backing for Cummins Range resource exploration
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Investors have shown enormous interest in RareX’s flagship Cummins Range rare earths project by backing its $10m placement to accelerate resource growth.
Domestic and offshore institutional investors have provided firm commitments for the placement, ensuring that the company is fully funded to complete an extensive drill program targeting the primary zone.
The company’s directors have also committed to invest a further $650,000 into the company, taking the total raised up to $10.65m before costs.
RareX (ASX:REE) had previously established the primary zone as a priority for exploration after estimating a conceptual Exploration Target of between 23Mt at 1.6% total rare earth oxides (TREO) to 41Mt at 2.4% TREO.
Proceeds from the placement of 111.11 million shares priced at 9c each – a 18.1% discount to the 15-day volume weighted average price of REE shares – will be used to fund a 30,000m drill program aimed at expanding and upgrading the current resource of 18.8Mt grading 1.15% TREO.
Funds will also be used to evaluate the recent high-grade phosphate discovery adjacent to Cummins Range, start study work and permitting activities and drive business development activities.
“We are very pleased with the overwhelming demand for this equity capital raising from both offshore and domestic institutions, many of which are first time investors in RareX,” managing director Jeremy Robinson said.
“This is a strong endorsement of our corporate strategy and is testament to the underlying quality of RareX’s Cummins Range Project.
“We are now fully funded to pursue an extremely exciting drilling program to grow the Resource to the next level as set out in our recently released Exploration Target.
“If we are successful, Cummins Range would rank as a top-3 rare earths project in Australia and one of the largest and most significant new rare earths development assets globally.
“The rare earths sector is about to go through another phase of significant growth, and we are very well placed to benefit with ownership of a large, high-grade asset in a Tier-1 jurisdiction.”
The Cummins Range project is located 130 southwest of Halls Creek in the East Kimberley region and is one of just two known carbonatite-hosted rare earth deposits in Australia.
Recent drilling success indicates wide zones of high-grade mineralisation in the primary zone that have extended mineralisation to about 240m below surface.
Should the exploration target be realised, Cummins Range could rank amongst the top three rare earth deposits in the country.
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.