Debt free with $58 million for Northern Minerals’ Heavy Rare Earth Play
August 25, 2013 — Tracy Weslosky, Publisher of InvestorIntel interviews George Bauk, Managing Director and CEO of Northern Minerals Limited (ASX: NTU) and asks him to provide the InvestorIntel audience with an overview of his company’s recent (very) good news; namely that Northern Minerals closed on an additional rights agreement and how the company is currently debt free.
Bauk states: “Back in February (2013), we announced a significant funding package with our major shareholder Conglin Yue (of Australian Conglin International Investment Group | ACIIG) to fund the company through to the completion of the feasibility studies and exploration. That was a package of $58 million. We’ve ticked a number of boxes along the way. We completed a placement for $4 million back in February as part of that package. The $58 million funding package also incorporated a $26 million rights issue, of which, we are now near completion and will be in Northern Minerals’ bank account by September 16, 2013. To date, we have received approximately $15 million of the $26 million (which will be complete in less than four weeks). The last task will be to seek shareholder approval for the $26 million for part sale of our Browns Range Project.”
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Tracy Weslosky addresses the difficulties mining companies currently face with regards to funding and asks Bauk to discuss Northern Minerals’ success and ability to raise money in challenging economic times — especially for the rare-earth market — and asks about Northern Minerals competitive advantage.
Bauk explains, “Since we had the discovery back in 2010, the real key feature of our project has been the ease of separation. And that’s two-fold: one is the fact that our heavy rare earths are found within a xenotime mineralization and the host rock is very simple (largely silica). So we’ve been able to construct a flowsheet that produces a high-grade mixed Rare Earth oxide — in a relatively simple, low-capital, low operating cost, that results in a potentially a great cash-flow business going forward. In addition, the property is approximately 8,800-square kilometers and we really have just begun the journey on the exploration front. We’re going to see some great news this year with our resource expansion. Northern Minerals has so much territory to cover and, as a result, I think we are going to have the potential for a very long-life project.”
Bauk then discusses some of the upcoming benchmarks Northern Minerals expects to achieve in 2013, including a resource expansion, a lot more exploration and continued ongoing drilling, release of a scoping study, and completion of Northern Minerals funding program, as well as commenting on both Professor Dudley Kingsnorth’s and Jack Lifton’s forecasts that the market will see an upturn in increased demand in rare earths — specifically, heavy rare earths — which are key to the economics of the Northern Minerals’ Browns Range Project.
Disclaimer: Northern Minerals Limited is an Advertorial member of InvestorIntel.
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>