Hastings Rare Metals (ASX: HAS) is on track to raise $5.3 million to advance the Hastings Heavy Rare Earth Project, receiving firm commitments for a share placement.
The placement has been significantly oversubscribed, with a number of institutional and sophisticated investors taking part.
Of the total $5.3 million, $3 million was received from two cornerstone Asian institutions.
Technical director Steve Mackowski said the strong interest from overseas investors reflected the "unique advanced stage" of the Hastings project.
"We now have funds for project development to match our project plan," Mackowski said.
"The next 12-15 months will see an escalating work load, but I believe the expected subsequent move to pilot plant and Bankable Feasibility will establish the Hastings project as one of the most advanced heavy rare earths projects in the world."
Hastings will issue about 53 million shares at a price of $0.10 each, with a one for one free attaching option expiring on March 31, 2014, exercisable at $0.15 each.
Shares will be issued in two tranches, with tranche 1 to be issued on completion and tranche 2 to be issued to the two cornerstone investors following shareholder approval, scheduled for March.
The attaching options will also be subject to shareholder approval.
Hastings heavy rare earths project
A recent scoping study ranks the Hastings project as one of the top heavy rare earth projects in the world, with an extremely high proportion of heavy rare earth oxides at 85% of total rare earth oxide ratio.
Hastings has a JORC Resource of 36.2 million tonnes at 0.21% total rare earth oxides, 0.35% niobium and 0.89% zanthium.
The study indicated that an open cut mine at Hastings could run for 15 years, producing 150 tonnes of dysprosium and 1,000 tonnes of yttrium based on a mining rate of 1 million tonnes.
Earnings before interest, tax, depreciation and amortisation have been placed at $150 million per annum, allowing for a short capital payback period of less than 5 years.
Funds from the raising will be put towards the advancement of the Hastings project, including:
- Validation and verification of the previously developed extraction circuit;
- Independent scoping study review;
- Optimisation of the product circuit to reflect the new emphasis on the heavy rare earths, dysprosium and yttrium, with by-product values from zirconium and niobium;
- Pre-feasibility study;
- Design of the revised pilot plant; and
- Working capital.