PERTH (miningweekly.com) – ASX-listed Northern Minerals will raise A$20-million in an oversubscribed share placement to sophisticated and institutional investors.

The company on Tuesday said that the private placement was priced at 4.9c a share, a 5.8% discount to Northern Minerals’ last closing price of 5.2c a share on February 11, and a 6.1% discount to the ten-day volume weighted average share price, with more than 408-million shares issued.

Investors in the placement will receive one free attaching unlisted option for every two subscription shares, with an exercise price of 7.4c each and an expiry date of three years from the date of issue.

The company told shareholders that funds raised from the placement would be used to further exploration work, carry out a feasibility study for a full scale beneficiation plant, test the company’s ore sorter, continued testing of the pilot plant and separation options, and for general working capital.

“Northern Minerals has committed to a priority work programme for 2021, focused on fast-tracking our pathway to achieving commercial production of a marketable heavy rare earths concentrate in response to emerging market demand for such a product,” said Northern Minerals CEO Mark Tory.

“To succeed with this approach, we will assess the technical and financial feasibility of constructing a standalone commercial scale beneficiation plant at Browns Range as well as planning a full-scale mining operation to feed the plant.

“We have worked diligently to clear debt from our balance sheet and maintain healthy cash reserves in the past six months that has allowed research and development work to continue in our pilot plant, including the purchase and installation of an ore sorting system that is due for completion this quarter.”

Tory said that the additional funds raised through the placement would provide Northern Minerals with the added flexibility to both fast-track feasibility work on the beneficiation plant and to ramp up resource expansion drilling with the objective of increasing the project’s life-of-mine.