Proactiveinvestors Australia

Northern Minerals www.northernminerals.com.au

Northern Minerals Limited (ASX:NTU) is focussed on the delivery of the heavy rare earth element, dysprosium. Through the development of its flagship project, Browns Range, Northern Minerals aims to be the first significant world producer of dysprosium outside of China.

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Northern Minerals makes splash with A$58M funding for rare earths feasibility study

Friday, February 01, 2013 by Angela Kean

Northern Minerals makes splash with A$58M funding for rare earths feasibility study

Northern Minerals (ASX: NTU) has successfully negotiated a A$58 million funding package to take its Browns Range Heavy Rare Earth project in northern Australia through to completion of a Feasibility Study.

The four stage funding package has been backed by Northern Minerals’ largest shareholder Conglin Yue, and his investment and trading company, Australia Conglin International Investment Group.

Yue currently holds a 19.9% interest in Northern Minerals and is Chairperson of Australia Conglin International Investment Group, which holds a number of investments in ASX-listed mining companies.

The group is a wholly-owned subsidiary of Huachen, one of the major coking coal and iron ore resource suppliers for BaoSteel and AnSteel.

It has long established business relationships with the Chinese rare earths industry, including Baotou, the world’s largest rare earth producer.

Northern Minerals will apply the funds to exploration activities at Browns Range to increase the resources to the target of between 22,000 and 29,000 tonnes TREO, as well as full project pre-development.


Key components

The funding package comprises four components:

- Sale of a 16% stake in the Browns Range project to Australia Conglin International Investment Group to raise $26 million, with an offtake agreement for an additional 20% of Browns Range production on commercial terms – subject to shareholder approval.

The sale values the Browns Range project at $162 million.

- Sale of the Northern Minerals Gardiner-Tanami gold assets to Australia Conglin International Investment Group to raise an initial $2 million – subject to shareholder approval.

The divestment involves 9,700 square kilometres in the Tanami-Arunta region.

All rights to explore for and mine rare earth elements will be retained by Northern Minerals, and the Boulder Ridge Tenement (EL29594) will also be retained by the company, with the rights for commodities other than rare earths granted to Australia Conglin International Investment Group.

If a JORC Resource, at least Indicated status, equal to or greater than the equivalent of 1 million ounces of gold is discovered within the Gardner Tanami project tenements, an additional $5 million will be payable to Northern Minerals within 90 days of the resource being defined.

- A placement of 18.8 million shares to sophisticated investors at $0.20 to raise $3.76 million.

- A rights issue, fully underwritten by Australia Conglin International Investment Group, for about $26.5 million, which will be announced following completion of underwriting documentation.

The non-renounceable rights issue will be comprise one new share for every two held at $0.20 each as well as one option for every two new shares issued exercisable at $0.30 and having a term of two years.

Northern Minerals will issue up to 132.68 million shares and 66.3 million options.


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