PERTH (miningweekly.com) – Rare earths miner Northern Minerals will undertake a further A$15-million capital raise to repay its R&D financier.
The new capital raise comes just a month after Northern Minerals undertook a A$20-million share placement to fund working capital expenditure and exploration.
The company on Tuesday announced that it would place some 150-million shares, at a price of 5c each to a sophisticated investor in China to raise an initial A$7.5-million.
Northern Minerals will also undertake a convertible note subscription for the issue of 7.5-million convertible notes with a face value of A$1 each, to a second sophisticated investor in China.
The convertible note and share issue are both subject to shareholder approval, as the issue price did not meet the minimum issue price requirement under the ASX listing rules.
The subscription funds for the notes will be advanced in two tranches, with A$2.5-million due before the end of April 2019, and a further A$5-million due by June 21. Northern Minerals can use these funds before the notes have been issued, but if shareholder approval for the note issue is not obtained, the company will have to pay back the subscription funds.
“Following on from the recent A$20-million placement, the new funds strengthen the balance sheet and allow us additional flexibility to repay our R&D financier. Any remaining funds will be used for working capital or to accelerate our planned enhancement initiatives that aim to derive extra value from Browns Range,” said Northern Minerals MD and CEO George Bauk.
“With interest in the rare earth sector increasing following the recent unsolicited takeover approach to Lynas Corporation, and the growth trajectory of electric vehicles becoming a federal election issue, we see the coming 12 to 18 months as a period to demonstrate our capabilities and reliability,” he added.