Australian Rare Earths Limited (ASX:AR3) Launches Rights Issue
Rights Issue Details
Australian Rare Earths Limited has launched a 1 for 3 non-renounceable rights issue at $0.068 per share, aiming to raise up to $3.6 million. Eligible shareholders will receive one free unlisted option for every two shares subscribed, with an exercise price of $0.10 expiring on 30 March 2029 unless accelerated. The offer price represents a 17.1% discount to the last closing price of $0.082 and a 20.0% discount to the 30-day VWAP.
Use of Funds
The funds raised will accelerate uranium exploration at the Overland Uranium Project and advance the Koppamurra Rare Earths Project towards Pre-Feasibility Studies. Additionally, the capital will support business development activities, potential acquisitions, general corporate activities, and expenses related to the offer.
Project Highlights
The Overland Uranium Project in South Australia has shown strong potential with early exploration results indicating significant uranium discovery opportunities. The Koppamurra Rare Earths Project, supported by a $5 million Australian Government grant, is progressing towards a demonstration facility and Pre-Feasibility Study, enhancing Australia’s rare earth supply chains for the clean energy transition.
Executive Comments
Managing Director and CEO Travis Beinke stated, “This rights issue comes at an important moment in AR3’s journey. We’ve made significant strides in transforming AR3 into a diversified critical minerals company, and this rights issue will allow us to accelerate both the development of our Koppamurra Rare Earth Project and exploration at our exciting Overland Uranium Project. Early results from exploration drilling at our Overland Uranium Project highlight the potential for a significant uranium discovery. It’s a compelling uranium exploration opportunity in a frontier uranium play. Through this rights issue, we’re providing our shareholders an opportunity to see new funds applied in a potential high-impact exploration program. Meanwhile, funds raised will also enable us to continue to progress work at our Koppamurra rare earths project – one of the most advanced ionic-clay hosted projects in Australia, and one recognised with strong Australian Government support, evidenced by the recent $5 million grant. This rights issue will help us to remain well-funded as we advance this project towards a Pre-Feasibility Study and establish a demonstration facility as we position Koppamurra as a project with a potential time-to-market edge in delivering new, diversified sources of supply, in particular for heavy rare earths, to the global rare earth supply chain. We thank our shareholders for their continued support and look forward to sharing our continued success with you.”
Motley Fool contributor Aaron Shaw has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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