PERTH (miningweekly.com) - ASX-listed Northern Minerals has secured A$58-million in funding to complete the feasibility study of its Browns Range rare earths project, in northern Australia.
The funding package comprises four components, the first of which was the sale of a 16% interest in the project to Australia Conglin International Investment Group, to raise an initial A$26-million.
An offtake agreement for an additional 20% of the Browns Range production had also been signed, subject to shareholder approval.
Northern Minerals would further sell off its Gardiner–Tanami gold assets to Australia Conglin International Investment Group to raise a further A$2-million.
Furthermore, the company would place some 18.8-million shares to sophisticated investors, at 20c a share, to raise a further A$3.76-million. A rights issue for around A$26.5-million would also be undertaken.
MD George Bauk said on Friday that, on completion of the four-stage transaction, the company would have raised a total of A$58-million, which would provide the funding for its two-year business plan.
“The fully underwritten rights issue for around A$26.5-million will give current shareholders the opportunity to participate in the funding solution of the company,” said Bauk.
He noted that the facility gave the company the security of funding the Browns Range project right through its resource expansion and study phases, to the cusp of construction.
“The agreement is a major boost for the company. It is a real vote of confidence in the Browns Range assets and our pathway to production.
“We have recently released our initial Joint Ore Reserve Committee-compliant resource and have an exciting programme of work under way to take the project towards production. This includes an exploration and resource development programme targeting between 22 000 t and 29 000 t of rare-earth oxides for an initial startup mining operation.”
The work programme also included ongoing beneficiation and hydrometallurgical studies, which were focused on developing a flowsheet to produce a high-purity mixed rare-earth oxide, which would further increase Northern Mineral’s marketing options.
First production at Browns Range was targeted for 2015.