Northern Minerals Ltd (ASX:NTU) (OTCMKTS:NOURF) (FRA:NUN) has entered into subscription agreements with various sophisticated and institutional investors in Australia, the US and Europe to raise A$20 million in a private placement.
The placement at A$0.049 per share was oversubscribed and priced at a 5.8% discount to the last closing price of A$0.052 on February 11, 2021, and a 6.1% discount to the company’s 10-day trading VWAP (Volume Weighted Average Price).
This placement consists of the issue of fully paid ordinary shares and unlisted options and is comprised of two tranches.
Funds raised from the placement will be used for:
- Further exploration at the company’s projects;
- Carrying out a feasibility study for a full-scale beneficiation plant;
- Testing of the company’s ore sorter;
- Continued testing of the company’s pilot plant and separation options; and
- General working capital purposes.
"Fast-tracking pathway to production"
Chief executive officer Mark Tory said: “Northern Minerals has committed to a priority work program for 2021, focused on fast-tracking our pathway to achieving commercial production of a marketable heavy rare earths concentrate in response to emerging market demand for such a product.
“To succeed with this approach, we will assess the technical and financial feasibility of constructing a standalone commercial-scale Beneficiation Plant at Browns Range as well as planning a full-scale mining operation to feed the plant.
“We have worked diligently to clear debt from our balance sheet and maintain healthy cash reserves in the past six months that has allowed R&D work to continue in our Pilot Plant, including the purchase and installation of an ore sorting system that is due for completion this quarter.
“The additional funds we have raised through this $20 million placement will provide us with the added flexibility to both fast-track feasibility work on the Beneficiation Plant and also ramp-up our Resource expansion drilling with the objective of increasing the project’s life of mine.”
EAS Advisors, LLC, acted as the company’s placement agent and financial advisor for the placement.
Investors in the placement will receive one free attaching unlisted option for every two subscription shares subscribed for, with each option to be exercisable at A$0.074 with an expiry date of three years from the date of issue.
The issue of all subscription shares under the Placement and all Tranche 1 Options will be made using the company’s existing placement capacity under Listing Rule 7.1.
Issue of the Tranche 2 Options is subject to the approval of the company’s shareholders being obtained and a notice of meeting convening a general meeting of shareholders will be despatched shortly in this regard.
If all of the options are ultimately exercised, the company will raise a further A$15,102,041 which will be directed towards the above initiatives or otherwise utilised as determined by the board.