A day after it was finally cleared to move forward its Malaysian rare earths processing plant, Australian miner Lynas Corp. is now rushing to gather at least $200 million to jumpstart the facility.
The funds, according to Lynas' statement to the Australian Securities Exchange, will be obtained through a fully underwritten institutional placement and share purchase plan of A$150 million and A$50 million, respectively.
"The funds raised would be used for working capital and general corporate purposes during commissioning and ramp-up at the plant," the rare earths mining firm said.
"We believe Lynas will need additional funds to get it through to first cash flows given a likely three-month minimum commissioning period," Deutsche Bank analysts said on Friday.
The equity raising will initially cover a $60 million placement to institutional investors and a second $90 million tranche but subject to shareholder approval.
The rare earths miner will encourage retail investors to take part through a $50 million share purchase plan, with each shareholder offered a maximum of $15,000 worth of new shares.
The shares will be priced at 75 cents, down 6.8 per cent compared to the company's last traded price of 80.5 cents.
"It can borrow up to $US80 million in further debt, however any other funding will need to come from forward sales or equity in our view," according to Deutsche Bank analysts.
"The exact size of the shortage of funds is difficult to forecast given uncertainty on further delays. We forecast Lynas requires $120 million."