LONDON (ShareCast) - (Sharecast News) - First Development Resources said in an update on Monday that it has raised £1m through an oversubscribed placing to fast-track rare-earth element exploration at its Selta project in Australia and advance gold drilling programmes across its portfolio.
The AIM-traded firm said the placing, comprising 33.3 million new shares at 3p each, represented a discount of around 8% to the previous closing price and includes one warrant per share exercisable at 5p for 12 months.

It said the fundraise was arranged by SI Capital and First Equity.

The company said the proceeds would primarily support an accelerated rare-earth exploration programme at Selta in the Northern Territory, where the geology is thought to be comparable to Arafura Rare Earths' nearby Nolans project.

Work would target the Ingallan and Nintabrinna West prospects and develop gold drill targets at the Lander West area, part of the interpreted Stafford Gold Trend.

At its Wallal project, funds would be used to secure access and permitting for future drilling of the Eastern and Border anomalies.

"This placing is in strategic response to the recently announced US-Australia Framework for securing supply in the mining and processing of critical minerals and rare-earth elements following China's decision to restrict exports of REEs," said chief executive Tristan Pottas.

"The REE potential at Selta has always been central to our plans for the project and this shift in geo-political policy allows us to greatly accelerate our planned REE exploration programme at Selta to properly define its potential as another world-class Australian REE project."

He added that with strong investor backing, the company was now "well-funded for a highly active three-pronged exploration programme at Selta and Wallal," including multiple REE initiatives and both reverse circulation and diamond drilling campaigns.

Admission of the new shares to trading on AIM was expected on or around 31 October, bringing First Development's enlarged share capital to 139.2 million ordinary shares.

At 1319 GMT, shares in First Development Resources were down 4.62% at 3.1p.

Reporting by Josh White for Sharecast.com.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE