28th Jan 2019 11:23
LONDON (Alliance News) - Rainbow Rare Earths Ltd on Monday said it has signed a new funding agreement with Lind Partners LLC worth over USD8 million.
The funding is made up of an unsecured convertible security of USD750,000 and a 24 month equity facility of up to USD7.0 million.
The mining company will use the proceeds for general capital requirements during 2019.
The unsecured convertible security has a two-year term and carries no coupon. It is convertible into shares after a minimum of four months from the date of the agreement, with the conversion price of 5.28 pence.
Rainbow shares were trading 2.6% lower on Monday at 3.80 pence each.
Over the next 24 months, Rainbow has an option to secure up to USD7.0 million through monthly subscriptions by Lind. An initial USD100,000 will be advanced to Rainbow as a prepayment for shares.
Thereafter, Rainbow has the ability to vary Lind's further monthly share subscriptions to between USD100,000 and USD300,000 over the next two years.
The terms of the agreement allow Rainbow to undertake additional financing, it said, and the company has the right to pause or terminate the agreement at either no or minimal cost.
"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," added Eales.
Related Shares:
Rainbow Rare Earths