Northern Minerals Ltd (ASX:NTU) continues to progress a proposed $20 million placement with Baogang Group Investment (Australia) Pty Ltd (BGIA) with approval gained from the state-owned Assets Supervision and Administration Department of the Chinese Government.
BGIA has also advised NTU that remaining Chinese regulatory approvals required for the private placement are progressing.
Last November at the annual general meeting, the company obtained shareholder approval for the subscription agreement entered into with BGIA.
The placement with BGIA, a wholly-owned subsidiary of a Chinese state-owned entity that owns steel mills in China, is for the issue of a total of 322,580,645 fully paid ordinary shares at an issue price of 6.2 cents per share.
Northern Minerals intends to use the funds raised towards progressing project enhancement initiatives for the Browns Range project, including ore sorting, product separation and increased exploration.
Government approvals progressing
Completion of the placement is also subject to the receipt of a no objections letter by BGIA from the Treasurer of the Commonwealth of Australia, under Australia’s foreign investment laws, to confirm that the Treasurer has no objections to the transaction.
BGIA has agreed with the Australian Foreign Investment Review Board (FIRB) to voluntarily extend the statutory deadline for the treasurer to make a final decision to February 27, 2020.
As a result, the company has agreed to extend the condition precedent satisfaction deadline by two months to eight months after the date of the subscription agreement, to April 15, 2020, to factor in the new FIRB decision deadline, the anticipated timing of remaining Chinese governments approvals plus any delays that may be faced in China as a result of the coronavirus outbreak.
The company will seek an ASX waiver under Listing Rule 14.7 to extend the deadline by which it was required to issue the shares to BGIA under the placement once shareholder approval was secured.
Northern Minerals will update the market as it receives further information from BGIA in relation to the status of the FIRB condition and remaining Chinese government approvals.