Greenland Minerals Ltd (ASX:GGG) (OTCMKTS:GDLNF) (FRA:G7P) has received firm commitments from institutional, sophisticated and professional investors to raise $30 million via a share placement at 24 cents per share.
The company has received strong support from new North American, European and Australian institutional investors.
This level of support highlights the significance of the Kvanefjeld Rare Earth Project in Greenland, one of the world’s largest undeveloped rare earth projects.
Share Purchase Plan
The company will also conduct a non‐underwritten share-purchase-plan (SPP) on the same terms to existing eligible shareholders.
It plans to raise around $3 million through the SPP which will see it fully funded to accelerate work programs to reach a final investment decision as the outlook for rare earth demand continues to strengthen.
“Endorsement of strategy”
Greenland managing director John Mair said: “The Kvanefjeld Rare Earth project is globally unique in terms of scale and favourable metallurgy, combined with large, low‐cost output of critical magnet rare earths (neodymium, praseodymium, terbium and dysprosium) and has Greenland well‐positioned to be a cornerstone to future international rare earth supply.
“A strong level of international investor support in the capital raising is testament to the growing profile of Kvanefjeld and an endorsement of the company’s development strategy.
“We welcome new investors both internationally and domestically.
“The capital raising comes on the back of important permitting milestones, and will allow us to accelerate all pre‐development work programs at a pivotal time with the demand for rare earths set to surge substantially through the coming years, creating an optimal development window.”
Use of funds
Proceeds of the capital raising will be used to fund number of activities including:
- Finalisation of licensing and permitting;
- Conversion of the optimised feasibility study to a definitive feasibility study;
- Advancement of offtake and project funding discussions;
- Expansion of organisational capacity to accelerate pre‐development work; and
- General working capital purposes.
The company plans to issue 125 million new fully paid ordinary shares at 24 cents per share under the company’s existing placement capacity.
Settlement of the placement is expected to occur on Wednesday, December 2, 2020, and the new shares will rank equally with the company’s existing shares on issue.
Canaccord Genuity (Australia) Limited acted as sole lead manager and bookrunner to the placement while CPS Capital Group Pty Ltd and Ashanti Capital Pty Ltd acted as co‐lead managers.
The company also plans to conduct a non‐underwritten SPP to existing eligible shareholders who had a registered address in Australia or New Zealand as on November 24, 2020.
The company may decide to accept applications (in whole or part) that result in the SPP raising more or less than the $3 million target amount, at its absolute discretion.
Participation is the SPP is optional and provides eligible shareholders the opportunity to apply for up to $30,000 worth of shares.
The SPP offer document containing full details of the offer will be released separately and is expected to be mailed to all eligible shareholders on or about December 1, 2020, being the date the offer will open.