Rainbow Rare Earths Limited US$1.0 million Unsecured Loan from CEO (9739D)
February 25 2020 - 2:00AM
UK Regulatory
TIDMRBW
RNS Number : 9739D
Rainbow Rare Earths Limited
25 February 2020
FOR IMMEDIATE RELEASE
25 February 2020
Rainbow Rare Earths Ltd ('Rainbow' or 'the Company') (LSE:
RBW)
Unsecured Loan of US$1.0 million from an affiliate of the CEO
George Bennett
Rainbow, the rare earth mining company, is pleased to announce a
new funding agreement with one of its largest shareholders,
Pipestone Capital Inc ("Pipestone"), of which George Bennett
(Rainbow's CEO) is the ultimate beneficiary.
The funding comprises an unsecured loan of US$1.0 million to
support Rainbow's development and operations. The funding is
intended to finance ongoing exploration, operations, working
capital and other general requirements.
The facility underlines the confidence placed in the Gakara
project by the CEO, George Bennett, who already holds an interest
in 8.6% of the Company's issued share capital. Since his
appointment in August 2019, George has set out a revised strategy
for the Company based around turning Gakara into a major strategic
source of rare earths, with the aim of producing at least 20,000
tonnes per annum of concentrate. The latest corporate presentation
can be found at www.rainbowrareearths.com
The loan carries no interest, however includes warrants over
2,000,000 new Ordinary Shares of no par value ("Ordinary Share"),
at a strike price of 4.55 pence per Ordinary Share, and a life to
expiry of 4 years. The strike price represents a premium of 30% to
the 20-day volume weighted average price of the shares prior to the
date of the agreement.
It is intended that the loan be repaid out of the proceeds of
any future fundraise; however Pipestone may elect to convert a
portion of the loan into equity on the same terms as those offered
to investors at that time.
Loan Amount: US$1,000,000
Loan Term: 12 months
Interest: Nil
Warrants: Over 2 million shares at 4.55 pence, valid for a
period of 48 months
Repayment: In full out of the proceeds of any subsequent fundraise,
or partial conversion into equity (on the same terms
as available to participants in that event)
Purpose: To be applied towards general working capital purposes.
The loan and its commercial terms were considered fair and
reasonable, and approved by Directors who have no interest in the
proposed transaction.
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
**ENDS**
For further information, please contact:
+27 82 652 8526
Rainbow Rare Earths George Bennett +44 (0) 20 3910
Ltd Company Jim Wynn 4551
SP Angel Corporate Ewan Leggat +44 (0) 20 3470
Finance LLP Joint Broker Charlie Bouverat 0470
-------------- ------------------- -----------------
Andy Thacker +44 (0) 20 3657
Turner Pope Investments Joint Broker Zoe Alexander 0050
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Notes to Editors:
Rainbow's focus is the Gakara Project in Burundi, one of the
highest-grade (47%-67% Total Rare Earth Oxide) rare earths projects
globally and the only African producer.
The Gakara basket is weighted heavily towards the magnet rare
earths, including neodymium and praseodymium, which are driving
demand and account for 70% of annual global REE sales due to their
use in vital components in motors, generators, wind turbines, and
electric vehicles.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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