Australian Securities Exchange (ASX)-listed Ionic Rare Earths (IonicRE) has secured firm commitments from key existing shareholders for a placement to raise $5.5m (A$8.45m) before costs.

In this placement, the company will issue around 423 million shares at $0.013 each.

IonicRE’s executive chairman Brett Lynch has agreed to subscribe to 38,461,539 shares to raise $500,000 under the placement.

That is in addition to Lynch’s $1.5m equity investment in January 2024, when he joined the board of the company.

The raised capital will be used to advance IonicRE subsidiary’s magnet recycling technology as well as upgrade the magnet recycling demonstration plant, which is currently producing separated magnet rare earth oxides in Belfast, UK.

The company will also use the funds to complete a feasibility study for a full-scale plant, which is expected to be completed by the middle of the year.

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Canaccord Genuity (Australia) and MST Financial Services were joint lead managers for the placement, with Canaccord acting exclusively as global coordinator and sole bookrunner.

The company also noted that the joint lead managers will be entitled to receive a fee equal to 6% of the placement proceeds, excluding the amount subscribed by Lynch.

IonicRE managing director Tim Harrison said: “We have received such a significant amount of interest from various magnet manufacturers, alloy makers and OEMs who are interested in utilising our world-class magnet rare-earth recycling technology for access to secure, sustainable and traceable rare earth supply.

“Demand at our operational demonstration plant in Belfast is now full for the next 18 months with potential partner trials advancing to plan.

“Further, our upstream project, the Makuutu Rare Earth Project, is also advancing well with several offtake negotiations with partners who will be evaluating our MREC being produced at the Makuutu demonstration plant. We are on the verge of a tangible increase in shareholder value. We greatly appreciate the support of existing shareholders with funding this placement.”