PERTH (miningweekly.com) – ASX-listed Northern Minerals has secured some A$49.5-million in funding to advance its Browns Range heavy rare earths project, in Western Australia.

The company on Wednesday announced that it had signed a binding memorandum of understanding with Chinese mining and investment company Jien Mining for equity funding of up to A$49.5-million.

Jien Mining would initially invest in Northern Minerals through a A$5-million convertible note facility, which would provide immediate capital to Northern Minerals, and following a due diligence, would invest through share and option placement.

The convertible note facility would be based on the provision of 25-million shares, at 20c each, while Jien Mining would be issued a further 110-million shares, at 20c each under the placement, to raise a further A$17-million, and an additional 110-million options, with an exercise price of 25c each, to raise a further A$27.5-million, if and when exercised.

The share placement would be subject to a due diligence before June 5, as well as Foreign Investment Review Board and shareholder approval.

Northern Minerals already received the first A$3-million tranche, with the remaining of the convertible note facility to be paid in two A$1-million instalments, due in March.

Northern Minerals MD George Bauk said on Wednesday that the deal introduced a new global partner to the company’s registry, with financial strength and mining experience.

“This is a key funding initiative and partnership, and reaffirms the quality of the project and the strong market fundamentals for our high-grade dysprosium product.”

Northern Minerals was hoping for a 2016 production start at Browns Range, after a 2014 prefeasibility study estimated that the project would have a net present value of A$446-million. The study was based on a conventional mining operation involving both opencut and underground operation, with Browns Range expected to deliver about 279 000 kg/y of dysprosium, over a mine life of ten years.

It was estimated that the project would require a capital investment of A$314-million.