Discovery Group subsidiary Defense Metals has completed a C$12.5m ($9.17m) private placement to develop its Wicheeda rare earth elements (REE) project in Canada.

This included the placement of 22.3 million shares by the company at C$0.26 apiece.

There was also a concurrent placement of 25.7 million shares, comprising a lead order from RCF Opportunities Fund II (RCF Opps II).

RCF Opps II subscribed for C$6.6m, representing a 9.99% stake in Defense Metals.

Defense Metals has offered RCF Opps II the right to participate in subsequent equity or debt fundings on a pro-rata basis.

The mineral exploration company plans to utilise the proceeds from the placement to conclude a pre-feasibility study and regional exploration work tied to the Wicheeda project in British Columbia.

The proceeds will also be used as general working capital and for meeting corporate costs.

Defense Metals CEO Craig Taylor said: “We are very pleased to welcome RCF Opps II as a key shareholder. We will continue to advance the Wicheeda light rare earth elements project and we look forward to working with the many stakeholders.

“We believe the Wicheeda Light Rare Earth Elements project is the best rare earths project in Canada and one of the best developing REE projects globally.”

The Wicheeda project is 100% owned by the company.

The 4,262-hectare property has a mill with an annual throughput of 1.8 million tonnes, producing 25,423 tonnes per annum of rare earth oxides over a 16-year mine life.

A technical report has outlined an after-tax net present value at 8% or $517m and an 18% internal rate of return.