29/09/2009 - 16:54

Lynas Corp plans $450m capital raising

29/09/2009 - 16:54

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Lynas Corporation plans to raise up to $450 million from institutional investors for a concentration plant at Mt Weld outside Laverton and an advanced materials plant in Malaysia following a failed funding deal with a Chinese mining outfit.

Lynas Corp plans $450m capital raising

Lynas Corporation plans to raise up to $450 million from institutional investors for a concentration plant at Mt Weld outside Laverton and an advanced materials plant in Malaysia following a failed funding deal with a Chinese mining outfit.

China Nonferrous Metal Mining terminated an agreement with Lynas in relation to a proposed equity and debt investment last Thursday because of additional undertakings sought by the Australian Foreign Investment Review Board.

Lynas will raise the capital at 45 cents per share, raising $88 million in an unconditional placement to existing institutional shareholders and other institutional investors, $295 million through a 1-for-1 underwritten non-renounceable pro-rata entitlement offer and approximately $67 million via an underwritten conditional placement.

Lynas executive chairman, Nicholas Curtis said the capital raising provided an opportunity to invest in its high quality Rare Earths Project which will be funded to completion of Phase 1 of the Project.

"Through Mt Weld, Lynas owns the richest deposit of Rare Earths in the world and its Phase 1 target production of 10,500t Rare Earths Oxides will help to fill the supply - demand imbalance expected in the future," Mr Curtis said in a statement.

"Lynas is committed to growth and the current expectation is that Lynas will move forward with the development of Phase 2 of the Rare Earths Project to 21,000t Rare Earths Oxides per annum as soon as possible after completion of Phase 1.

"The proposed equity raise will ensure Lynas maintains a conservative capital structure and balance sheet flexibility as it seeks to fund future expansion."

Mt Weld is located in the North-eastern Goldfields of Western Australia, approximately 32 kilometres southeast of Laverton, and 10 kilometres east of the Barrick Gold Corporation Granny Smith gold mine, formerly owned by Placer Dome.

The Project is based on the Mt Weld carbonatite deposit, a concentration of Rare Earths elements.

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