- Greenland Minerals (ASX:GGG) received firm commitments from institutional, professional and sophisticated investors to raise $30 million (before costs).
- The Placement received overwhelming support from domestic as well as international investors.
- The funds from the Placement are intended to be used in facilitating the fast-tract development of Kvanefjeld rare earth project.
- Greenland Minerals has also launched a Share Purchase Plan.
ASX-listed rare earth minerals explorer, Greenland Minerals Limited (ASX:GGG) has received firm commitments from institutional, sophisticated and professional investors to raise $30 million (before costs).
The capital raising garnered strong support from new North American, European and Australian institutional investors, highlighting the significance of the Kvanefjeld rare earth project. Notably, Greenland Minerals has been actively committed to developing one of the globally most significant and advanced emerging rare earth projects in Southern Greenland.
Greenland Minerals shares traded at $0.260 mid-day on 25 November 2020. Notably, the shares have shown a price momentum of 2.32x on the year-to-date basis.
Lens through the Placement Details
Greenland Minerals announced that 125 million new fully paid ordinary shares will be issued at the issue price of $0.24 under the Company’s existing placement capacity under ASX Listing Rules 7.1.
Greenland Minerals expects the settlement of the Placement to occur on 2 December 2020. The new shares would rank equally with the Company’s existing shares on issue.
Canaccord Genuity (Australia) Limited acted as Sole Lead Manager as well as the Bookrunner to the Placement. Canaccord Genuity will receive 4% Capital raising fee and 2% Management fee. Meanwhile, Ashanti Capital Pty Ltd and CPS Capital Group Pty Ltd acted as Co-Lead Managers.
The proceeds of the Placement will be used to fund varying developments.
Launch of Share Purchase Plan Offer
The Company also intends to conduct a non-underwritten SPP offer to existing eligible shareholders, with the aim to raise $3 million with the issue of 12.5 million ordinary shares. The eligible shareholders should have registered address in Australia or New Zealand as at 5:00 pm (AWST) on 24 November 2020.
The Company holds absolute discretion concerning the decision to accept applications (in whole or part). It can result in SPP raising more or less than the intended amount. A scale back can be applied if the offer is over-subscribed on the discretion of the Board.
The SPP offers eligible shareholders the opportunity to apply for shares at the issue price of $0.24, which is same as that of the Placement. Significantly, participation is optional in SPP having the maximum acceptance value of $30,000. All the applicable parcels available for the offer include $1,000, $2,000, $5,000, $10,000, $20,000 and $30,000.
The SPP offer will open on 1 December 2020 and has the closing date of 15 December 2020. The Company will release the SPP offer document containing full details of the SPP offer on the ASX separately. Meanwhile, the document will also be mailed to all eligible shareholders on or about the offer opening date.
Capital Raising Amid Strong Project Economics and Robust RE Demand
The Kvanefjeld rare earth project is globally unique with respect to scale and favourable metallurgy. Significantly, it has a large, low-cost output of all critical magnet rare earths (Nd, Tb, Pr, Dy). The Project has well-positioned Greenland to be a cornerstone to future international rare earth supply.
Welcoming new investors both internationally and domestically, Greenland Minerals’ Managing Director Dr John Mair stated that a strong level of support in the capital raising from international investors is a testament to the flourishing profile of Kvanefjeld. Meanwhile, it is also an endorsement of the development strategy of the Company.
Mr Mair indicated that the capital raising comes on the back of significant permitting milestones. It will facilitate the acceleration of all pre-development work programs at a pivotal time when the rare earths’ demand is set to surge substantially through the coming years, creating an optimal development window.
Way Forward for the Company