Red Mountain Mining raises $850,000 to advance lithium and rare earth projects
Red Mountain Mining (ASX: RMX) has received firm commitments for an $850,000 capital raising to advance its US lithium exploration projects and fund a recent farm-in of the Monjebup rare earth project owned by Liontown Resources (ASX: LTR).
The money will be raised via a share placement to professional and sophisticated investors and is reported to have received strong support from the company’s existing major shareholders.
It will be completed at a price of $0.04 per share in a single tranche.
Participants will also be issued one attaching option for every two placement shares, exercisable at $0.08 each and expiring three years from the date of issue.
Funds raised will also be directed towards exploration of Red Mountain’s existing asset portfolio, a review of potential new ventures and for working capital purposes.
Share purchase plan
Red Mountain has confirmed it will carry out a share purchase plan to raise up to $750,000 on the same terms as the placement.
Shareholders residing in Australia or New Zealand will be eligible to apply for up to $30,000 of shares also priced at $0.04 each.
Directors Troy Flannery and Lincoln Ho have already confirmed they will take part.
Each participant will be entitled to one free attaching option for every two shares issued under the purchase plan (exercisable at $0.08 each and expiring three years from issue).
Red Mountain said a prospectus would be available to shareholders and oversubscriptions may be considered at the company’s discretion.
Subject to ASX requirements, the company intends to seek quotation of all options issued.
Xcel Capital Pty Ltd has been appointed lead manager for both parts of the capital raising.
The company will be paid a $20,000 management fee plus a 6% fee across all funds raised; and be issued with 30 million options on the same terms as the placement and purchase plan.
Farm-in agreement
In early July, Red Mountain entered into a farm-in agreement with Liontown which gives it the option to acquire an 80% interest in the prospective Monjebup project in southern Western Australia.
The project comprises 321 blocks covering approximately 910 square kilometres in the Albany Fraser Orogen rare earths province.
Red Mountain said it was planning to launch exploration activities including grid sampling and metallurgical testwork to determine the leaching potential of rare earth elements at Monjebup.