Northern Minerals is set to raise $20 million, which will be used towards the progression of its Browns Range rare earths project in Western Australia.
The capital will fund project enhancement initiatives including ore sorting, product separation and increased exploration.
Northern Minerals has commenced a scoping study to investigate separation technology on intermediate mixed rare earths materials produced from Browns Range.
If adopted, the technology allows Northern Minerals to produce separated rare earth oxides, including dysprosium oxide and terbium oxide for sale directly to permanent magnet makers globally.
Crucially, this bypasses the need to send mixed rare earth carbonate that currently requires separation in China.
Northern Minerals has chosen United States-based K-Technologies to assess the suitability of its technology.
The scoping study will involve Northern Minerals sending intermediate mixed rare material to K-Tech’s laboratory in Florida for the bench scale separation and purification testwork.
This will look at the yield potential of targeted rare earth elements and will include an estimate of associated operating and capital costs.
Northern Minerals chief executive officer George Bauk said the pilot plant project was about understanding the potential to become a “globally-significant rare earth producer.”
“The investigation of separation technology is a natural extension of the existing pilot plant studies. With everything we do, we are looking at ways of doing it better, more profitably and delivering value to our shareholders,” he said.
“With the recent announcements regarding the adoption of ore technology, which will increase production and reduce costs, this exciting new initiative has the potential to take that increased production and convert it into a significantly more valuable and sought-after end product.”
The sample is planned to be dispatched to K-Tech in August 2019 with initial testwork results expected in the December quarter.
If the bench scale testwork and scoping study is successful, Northern Minerals intends to undertake a pilot testwork program and install the technology as part of the current pilot plant project at Browns Range.
Northern Minerals will issue more than 322 million ordinary shares at a price of $0.062 a share for the $20 million placement, subject to approvals. It represents around 13 per cent of the company’s existing share capital.