October 27, 2010 — Thunder Bay, ON (Source: Marketwire) — Rare Earth Metals Inc ("Rare Earth Metals", "RA", "REM" or the "Company") (TSX VENTURE:RA) announces that, subject to regulatory approval, it will be conducting a non-brokered private placement of up to 4,347,826 units ("Units") at a price of $0.46 per Unit to raise proceeds of up to $2 million.
Each Unit will consist of one flow-through common share and one half of a share purchase warrant with each whole warrant entitling the holder to acquire one additional non-flow-through common share at a price of $0.60 per share for a period of one year from closing (the "Unit Warrants"). The Unit Warrants are subject to the right of the Company to accelerate the exercise period for the Unit Warrants if, after the expiry of the applicable hold period, the common shares of the Company trade above $0.64 for a period of 10 consecutive trading-days. Finder's fees of up to 8% may be payable in respect to part of the financing.
The proceeds of the private placement will be used for on-going exploration expenditures.
Shareholder Rights Plan
The Company also announces that its Board of Directors and shareholders have approved the adoption of a Shareholder Rights Plan Agreement (the "Rights Plan"). The Rights Plan was adopted to ensure the fair treatment of all REM shareholders in connection with any take-over bid for the outstanding common shares of REM. The Rights Plan provides shareholders with adequate time to properly evaluate and assess a take-over bid without facing undue pressure or coercion. The Rights Plan also provides the Board with additional time to consider any take-over bid and, if applicable, to explore alternative transactions in order to maximize shareholder value.
The Rights Plan is not designed to prevent take-over bids that treat REM shareholders fairly. Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders are deemed to be "Permitted Bids". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for 60 days. In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of REM at a significant discount to the market price of the common shares at that time.
The Rights Plan was not adopted in response to any proposal to acquire control of REM.
The Rights Plan is subject to approval by the TSX Venture Exchange and was presented for ratification by the shareholders of REM at their Annual Meeting on October 13, 2010 and was unanimously approved. The Rights Plan will have a term of three years.
About Rare Earth Metals Inc.
Rare Earth Metals is a well funded company with a focus on exploring for Rare Earth Element deposits. The company presently has two advanced projects in Ontario and Newfoundland and Labrador, all exhibiting multi element potential (REEs, Niobium, Beryllium, Zirconium and Iron Ore) and proximity to available infrastructure. Its flagship property is the Clay-Howells Prospect. Additional information concerning the Corporation is contained in documents filed by the Corporation with securities regulators, available under the company's profile at www.sedar.com. Investors are invited to visit the Rare Earth Metals web site at www.rareearthmetals.ca.
ON BEHALF OF THE BOARD OF DIRECTORS OF RARE EARTH METALS INC.:
Michael Stares, President and CEO
This release includes certain statements that may be deemed forward-looking statements. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's filings that are available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.