Subject to shareholder approval, the company has raised A$11.1 million at 45c per share, a 14.5% discount to recent trading. Every three shares will come with one 57c option that could raise another $5 million over the next two years.

 

Institutional and sophisticated investors, including several "highly regarded" international funds backed a $10.7 million placement, and AR3's directors have pledged another $400,000.

 

Canaccord Genuity and Sprott Capital Partners managed the raising.

 

Acting managing director Rick Pobjoy said the cash injection would fund more resource definition drilling, metallurgical test work, community and stakeholder engagement and further evaluation of downstream processing options for what the company calls an ionic clay-hosted rare earth resource of "global and multigenerational significance".

 

It recently boosted resources at Koppamurra by 25% to 101 million tonnes grading 818ppm total rare earth oxide.

 

It is arguably the most advanced deposit of its type in Australia.

 

The project, in the border region with Victoria, has seen drilling over just 5% of the landholding, but crucially AR3 has completed rehabilitation trials and successfully produced the nation's first mixed rare earth carbonate from a clay-hosted deposit.

 

It has set an expanded exploration target for Frances and Dovetail covering areas already drilled between 330Mt and 1.4Bt, an increase of 536% at the upper end of the range.

 

The company is targeting production by the middle of the decade. 

 

Shares in AR3, which have traded in a range of A18-80c over the past year, started the month at 24c, but closed yesterday at 61c.

 

The stock was off 18% this morning at 50.5c after news of the placement, valuing the company at $67 million. 

 

The company started the year with $9 million cash.