Perth-based rare earths junior explorer Energy Transition Minerals (ASX: ETM), formerly trading as Greenland Minerals Limited, has hired Canaccord Genuity to sound out institutional investors for a $7 million share placement, with the option of an additional $2 million.
The fundraising is at 6.8¢ per share – a 20% discount to Energy Transition Minerals’ 8.5¢ closing price on Friday, valuing the smallcap at $120 million.
As well as strengthening the explorer’s balance sheet, which last year was around $13 million, cash has also been earmarked to help fund litigation against Greenland and Denmark.
The explorer recently found itself in United States President Donald Trump's crosshairs regarding the purchase of mineral-rich Greenland.
Also responsible for making the explorer's (Greenland) assets front and centre of world attention are plans by the U.S. and European Union to loosen China’s global dominance over rare earths and other critical minerals.
As a result of all this attention, Energy Transition Minerals saw its share price soar fourfold since 23 December last year.
Trump’s antics have highlighted the explorer’s Greenland-based assets, notably the Kvanefjeld project, said to be the world’s second-largest rare earth oxide deposit and the sixth-largest uranium find.
Ongoing ban
The company has spent $150 million developing the mine and obtaining approval, but government concerns over mining uranium and Chinese influence prevent the project from moving forward.
It’s understood that Energy Transition Minerals has been stuck in a legal battle since Greenland banned uranium mining three years ago.
Included on the explorer’s shareholder register is one of the world’s biggest rare earth producers, China’s Shenghe, which controls 9% of the stock.
Without naming names, Greenland’s prime minister, Mute Egede has disclosed that the island had “denied an exploitation licence two years ago” to a miner with “China-based ownership”.
No Chinese control
Daniel Mamadou the explorer’s CEO recently noted that any inference by prime minister Egede that the Aussie rare earths junior explorer was a Chinese mining company was simply misleading.
However, Egede made it clear that his preferred investment was in European or U.S. companies.
Mamadou suggested that Egede’s bias towards certain types of investors raised serious questions around the objectivity and fairness of the Greenlandic government's decision-making process, especially as it relates to the Kvanefjeld project.
Mamadou reminded the Greenland government that Shenghe held “no controlling interest, and it has never exerted influence, inconsistent with western business practices”.
“Our list of shareholders is long, and it comprises distribution investors, sovereign funds and private investors alike from all around the world. This includes Australia, the U.S., Europe, Asia, including China,” he said.
Greenland, which holds huge untapped mineral reserves has a population of 57,000 and is dependent on Denmark.
Energy Transition Minerals recently hired former foreign minister Julie Bishop to assist with its long-running legal dispute in Greenland.
