Northern Minerals to raise $5.3m to drive Browns Range HRE project
March 18, 2014 (Source: Northern Minerals) — Highlights:
- $5.3 million to be raised through new equity funding to increase certainty and flexibility for development of Browns Range Heavy Rare Earth (HRE) project
- Funding initiative includes a Placement at $0.18 per share to sophisticated investors, including major shareholder Australia Conglin International Investment Group (ACIIG)
- Funding to be used to support Browns Range feasibility studies and approvals following a positive Scoping Study outcome
- Proposed sale of gold assets to ACIIG (as announced in 2013) to no longer proceed
- Proposed $26 million acquisition of a 16% stake in the Browns Range HRE project by ACIIG (as announced in 2013) remains under consideration and subject to Northern Minerals Board and shareholder approval
Northern Minerals (ASX:NTU) is pleased to announce it will raise $5.3 million for its Browns Range Heavy Rare Earth (HRE) project in northern Western Australia.
The funding initiative will include a Share Placement (Placement) which has been supported by major shareholder Australia Conglin International Investment Group (ACIIG).
Northern Minerals is seeking to raise $5.3 million through a Placement to sophisticated investors at $0.18 per share, which is a 9.1% premium on the closing share price on 17 March 2014. This will include a pro rata placement to ACIIG (subject to shareholder approval). Details of the Placement are set out on page two of this announcement.
Northern Minerals’ Managing Director Mr George Bauk said the funding initiative would support the Browns Range pathway to production by 2016.
“This funding increases the certainty and flexibility for Northern Minerals as we take Browns Range through the current feasibility studies towards production,” Mr Bauk said.
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“We are pleased to have the ongoing support from our major shareholder ACIIG, which has reinforced its long term commitment to the project and development strategy.
Mr Bauk said the funding would be directed to a number of work programs as part of the feasibility study, as well as for general working capital. As at 17 March 2014 the company had a cash position of $6.5m, with the additional $5.3m allowing the company to maintain momentum along its pathway to production.
“Our earlier scoping study activities delivered positive economic outcomes, supporting the progression to a Pre-Feasibility Study which we are aiming to complete next quarter,” Mr Bauk said.
“We have also delivered a number of milestones since the scoping studies which have made the project even more robust. This includes significant increase in our JORC resource and improvements in the beneficiation flowsheet – both of which we expect to have direct and positive impacts on the economics of the project.”
Northern Minerals also advises that the proposed sale of its Gardiner-Tanami gold assets to ACIIG for $2 million will now no longer proceed.
The gold asset sale was proposed as part of a funding package announced in February 2013, to raise a total of $58 million, with the backing of ACIIG. During 2013, the company successfully raised $30 million through that funding initiative.
The proposed $26 million acquisition of a 16% stake in the Browns Range HRE project by ACIIG (as announced in 2013) remains under consideration and subject to Northern Minerals Board and shareholder approval.
Northern Minerals has agreed to complete a private Placement of fully paid ordinary shares in the Company, pursuant to ASX Listing Rule 7.1.
The Placement will be made to sophisticated investors at the price of $0.18 per share. It will include Northern Minerals’ major shareholder ACIIG, which (subject to shareholder approval) has agreed to take 13,450,561 new shares. If approved by shareholders, this will mean ACIIG will retain its current equity stake in Northern Minerals at 45.5%.
The placement shares (other than those for ACIIG) will be issued by 21 March 2014. The ACIIG placement shares are subject to shareholder approval and a notice of meeting will be sent to shareholders shortly.
About Northern Minerals:
Northern Minerals Limited (ASX: NTU) is focused on development of rare earth elements (REE), with a large and prospective landholding in Western Australia and the Northern Territory. The Company’s flagship project is Browns Range, where it has a number of projects with high value HRE in xenotime mineralisation. In particular, the mineralisation includes high levels of dysprosium and yttrium, which are in short supply globally and expected to be increasingly sought after as world economies stabilise and recent trends in urbanisation and technology diffusion, particularly in Asia, accelerate. Following outstanding results from its drilling programs the Company has delivered an expanded Mineral Resource estimate, and is advancing Browns Range toward production using a relatively simple and low cost processing flowsheet to produce a high grade mixed Rare Earth oxide. Northern Minerals also has a HRE exploration program underway at the geologically similar John Galt and Boulder Ridge projects.
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