Australian Rare Earths Launches $3.6M Entitlement Offer for Koppamurra Project

About Australian Rare Earths Limited

Australian Rare Earths Limited (ASX: AR3), founded in 2019 and headquartered in Adelaide, South Australia, is a mineral exploration company focused on the discovery and development of rare earth element (REE) deposits. The company’s flagship asset is the Koppamurra Rare Earths Project, one of the most advanced clay-hosted REE projects outside China. Koppamurra spans both South Australia and western Victoria and is a key player in Australia’s strategy to develop secure supply chains for rare earths vital to clean energy and advanced manufacturing. AR3’s shares are currently trading at $0.081 per share.

Details of the $3.6 Million Entitlement Offer

The non-renounceable entitlement offer allows eligible shareholders to subscribe for 1 new share for every 3 shares held, at an offer price of $0.068 per share, representing a modest discount to AR3’s recent trading range. Each new share issued will also include one free attaching option for every two new shares subscribed for. The options are exercisable at $0.10 and will expire on 30 March 2029, unless accelerated if the AR3 share price exceeds $0.15 for 20 consecutive trading days.

The entitlement offer opens on 31 March 2025 and is scheduled to close on 14 April 2025. Eligible shareholders may take up all, part, or none of their entitlement. The offer also includes a top-up facility, allowing shareholders who fully take up their entitlements to apply for additional shares from any shortfall.

The placement is expected to issue up to 52,996,576 new shares and 26,498,288 options if fully subscribed, contributing to the company’s capital base for the next stage of development.

Strategic Use of Funds

Funds raised through the entitlement offer will support AR3’s ongoing work programs at the Koppamurra Rare Earths Project. The company is focused on completing additional exploration, metallurgical testing, and progressing environmental approvals, positioning the project for potential development decisions.

In addition to direct project development, proceeds will be allocated toward general working capital and to meet the costs associated with the entitlement offer. AR3 is also prioritising the advancement of resource definition and potential expansion activities across its broader tenement holding, which is considered prospective for further rare earth mineralisation.

Positioning for Growth in the Rare Earth Sector

The entitlement offer comes at a time when rare earths, particularly neodymium and praseodymium, are seeing increased demand due to their critical role in the global energy transition. As the only Australian rare earth company with a significant clay-hosted REE resource at an advanced stage of evaluation, AR3 is strategically positioned to contribute to diversifying the global rare earths supply chain.

Clay-hosted deposits like Koppamurra are particularly sought after due to their typically lower-cost processing compared to hard rock REE deposits, providing AR3 with a competitive advantage as the project advances.

Management noted that strong shareholder support during the offer would allow the company to fast-track development milestones and prepare for potential future capital works, including pilot-scale processing and offtake discussions.

Key Dates and Investor Considerations

The entitlement offer closes at 5:00 pm (Adelaide time) on 14 April 2025. Settlement of new shares is expected on 15 April 2025, with quotation of new shares commencing on the ASX from 22 April 2025.

Shareholders and investors will be watching closely for updates on the company’s exploration results, project permitting progress, and developments in the broader rare earth market. With a substantial land position, a promising resource base, and a strengthened balance sheet following the raise, Australian Rare Earths is well-positioned to remain a leading player in Australia’s critical minerals sector.