Greenland to raise $6m for rare earths project

Perth-based rare earths explorer Greenland Minerals and Energy will undertake a $6.1 million non-renounceable rights issue to fund ongoing work at its Kvanefield project.

Greenland said it would offer the rights issue to institutional and sophisticated shareholders on a one-for-four basis at 3.5 cents a share.

It has been partially underwritten to $3 million by Patersons Securities, while CPS Capital Group acted as co-manager.

The offer price is a 37 per cent discount to Greenland’s one month volume-weighted average price, and a 45 per cent discount to its three-month VWAP.

Greenland shares dropped 21.5 per cent to 4 cents each at 11:20am.

“Net proceeds together with existing cash reserves will be used to complete the documentation for a mining license application for Kvanefield, and cover costs associated with the processing of the application by the Greenland government,” the company said.

“The directors are extremely pleased to be able to offer eligible shareholders the opportunity to participate in the rights issue, which will see the company well-funded to take Kvanefield through the all-important permitting phase, and towards project development.

“Stakeholders will be given the opportunity to apply for additional shares in excess of their entitlement.”

Greenland has completed several studies at Kvanefield over the last two years, and has established an 108 million tonne ore reserve estimate, to underpin an initial 37 year mine life.

The mine has the potential to produce rare earths, with by-production of uranium, zinc, lantheanum, cerium and fluorspar.