EDITOR: | June 9th, 2014 | 3 Comments

Northern Minerals passes on $26M offer to maintain control

| June 09, 2014 | 3 Comments
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Northern Minerals (‘Northern’, ASX: NTU) has decided not to sell an AUD$ 26 million minority interest in its Browns Range heavy rare earths project in Western Australia. This is actually good news and it suggests that Northern’s management is very confident in its future and the rare earths market. The minority interest in question concerned a 16% interest in Northern’s Browns Range project to the Australia Conglin International Investment Group (ACIIG). The ends of the negotiations over the deal have in no way hampered the close ties between ACIIG and Northern; the former shall remain Northern’s main shareholder. ACIIG has a large stake in an AUD$ 5.4 million placement completed this year.  Northern Minerals is pleased to announce it will raise $5.3 million for its Browns Range Heavy Rare Earth (HRE) project in northern Western Australia. That placement adds to the AUD$ 6.5 million already in Northern’s coffers, easing the path to completion.

Northern feels that the placement will be sufficient to support the Browns Range project toward production stage, expected to be reached after the current feasibility study phase some time in 2016. Northern’s confidence boost comes from the fact that metallurgical tests and an increased JORC resource and upgraded beneficiation flowsheet, noted during the scoping studies, have placed Northern’s position and its project at a higher level than when the sale of a minority stake had been considered. In both cases, the sale of the stake and now the reconsideration of that sale, Northern’s goal was to maintain flexibility. Having secured the funding to complete the feasibility study, it has managed to keep full control of any additional funding mechanisms with a view toward the larger capital costs as the project edges toward production.

The current resource estimate for the Browns Range project now stands at 4.13-million tons of at 0.68% (or 28,084 tons TREO) while the pre-feasibility study for Browns Range should be issued sometime this summer. The Browns Range project, therefore, offers very promising economics, especially in view of the fact that it is expected to being able to deliver a high percentage of the critical and much in demand heavy rare earths (HREE) such as dysprosium – up to 82%. Such is the concentration of ‘heavies’ that Northern could survive on the production of dysprosium alone. Northern also noted that it has faced little difficulty in extracting the xenotime (the mineral containing the rare earths) from the host rock.

The context in which Northern will be operating has also become more favorable. China’s concern with pollution and its efforts to curb toxic waste and emissions will curb production, helping to improve prospects for rare earth miners everywhere else. One of the likely tools to achieve this, in respect of the World Trade Organization’s demand that China lift export quotas, will be in the form of  special export taxes to be imposed on rare earths; such a measure is sure to increase prices. Chinese authorities have already targeted illegal miners, and have realized that environmental pollution has become a very politically sensitive issue, one that if left unaddressed could provide the park for social unrest on a scale unseen since the events leading to “Tiananmen Square” exactly 25 years ago. Chinese authorities may actually go as far as demanding environmental compliance certificates for exports. The unregulated production of rare earths in China has been blamed for generating such noxious substances as fluorine; cadmium has also been found in wastewater: both cause cancer. Meanwhile, considering much of China remains rural, the damage to agricultural land caused by acid leaching has become a major issue.


Editor:


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Comments

  • merlion

    Nice piece Alessandro.
    In your second last paragraph, you note a current resource estimate of 28,084 tons of TREO.
    This resource size was upgraded to 48,000 tonnes on 26 February 2014.
    http://northernminerals.com.au/corporate/announcements/#2014-2

    See highlights below:
    Wolverine Total Resource Doubled in a Major Upgrade of
    Browns Range HRE Mineral Resource Estimate
    Highlights:
    Major upgrade in Heavy Rare Earth (HRE) resource at Browns Range Project with the global Mineral Resource now estimated at 47,997,000kg (47,997 tonnes) of total rare earth oxides (TREO) in 6.48
    million tonnes @ 0.74% TREO (classified and reported according to the guidelines of the 2012 JORC Code1).

    June 9, 2014 - 5:30 PM

    • longtermlegs

      merlion, good pick up

      plus another announcement out today …. they have cracked the metallurgy ….. Northern Minerals has completed successful pilot scale testing of its hydrometallurgical processing plant for the Browns Range Project

      http://www.stocknessmonster.com/news-item?S=NTU&E=ASX&N=680281

      Highlights:-

      Hydrometallurgical pilot plant testing of Browns Range 20% Total Rare Earth Oxide (TREO) mineral concentrate confirms simple and robust flowsheet – amenable to commercial operations.

      High recovery of dysprosium1 at 90%, with 88.2% TREO recovery.

      Delivery of a high purity mixed rare earth (RE) oxalate(46% TREO) or oxide (99% TREO) product.

      Simple acid concentrate mixing and kiln operation, with no material handling issues.

      June 10, 2014 - 6:56 AM

  • Hiwayman

    Merlion,
    Glad to see that someone is on the ball 🙂

    And lets not forget that Northern’s xenotime mineralization is often
    referred to as the ‘thinking man’s mineral’ and anyone who is remotely
    paying attention at Northern’s meetings/gatherings, will understand that
    when a thinking man asks the ‘right question’, he invariably receives
    greater insight.

    A wise man once said..’all truth passes through three stages. First, it
    is ridiculed.Second, it is violently opposed.Third,it is accepted as being
    ‘self evident.’

    Suffice to say..Northern is being ‘readied’ for HRE prominence in the
    coming commodities Bull Run.

    June 11, 2014 - 6:12 AM

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