London-listed Rainbow Rare Earths has agreed to issue about 72.45-million shares in the company to raise £7.52-million to further develop its Phalaborwa project, in South Africa, and to cover the company's financing requirements beyond the first quarter of 2024.

Existing shareholder TechMet contributed £5.54-million, while Pella Ventures – also an existing shareholder – contributed £790 000.

Other investors, including some of Rainbow's board members, contributed £1.18-million.

"We are delighted to have received support from various strategic shareholders in Rainbow, including TechMet. Following a rigorous independent technical and environmental, social and governance due diligence process, TechMet has confirmed that they share our view that Phalaborwa is one of the most exciting rare earth development projects globally. I am particularly pleased with the strong support at a premium to the market price from members of the Rainbow board.

"The funds raised will provide funding beyond the end of the first quarter of 2024, thereby ensuring the delivery and operation of the Phalaborwa pilot plant and the production of the first separated rare earth oxides for testing and marketing purposes in offtake agreements with potential partners, as well as delivering the completion of the project's definitive feasibility study," says CEO George Bennett.

"Phalaborwa provides the opportunity to fast-track production of the four most economically important rare earth elements, which are used to make the permanent magnets essential to wind turbines, electric vehicles and other modern day consumer products vital to the twenty-first global economy.

"This funding will ensure the completion of the pilot plant, de-risking the Phalaborwa project and the Rainbow investment proposition. It is a validation of the company's proprietary separation technology and its strategy to identify other secondary near-term sources of rare earths globally," adds TechMet chairperson and CEO Brian Menell.

TechMet has also been granted the right to nominate one director to Rainbow's board for so long as it holds at least 10% of the company's shares. TechMet operations director Darryll Castle is expected to be appointed to the Rainbow board.