Northern Minerals has entered into two separate agreements for $27 million in funding for the development of its Browns Range heavy rare earth pilot plant in Western Australia.
Chinese company NRE is the investor for the larger of the two agreements. It will provide $25 million in four tranches for a total share of 17.2 per cent of Northern Minerals.
The first tranche of $1 million has been paid to Northern Minerals already, with a second tranche of $1 million to follow on October 31.
The third tranche of $10 million will follow on November 30 and the final tranche of $13 million on December 31 for more than 240 million shares.
These tranches are still subject to the approval of Northern Minerals’ shareholders and Chinese regulatory approvals.
A private investor has also executed a $2 million subscription agreement for more than 22.2 million shares at 9 cents per share.
“We welcome this new investment by NRE, which followed a non-solicited approach to the company,” explained Northern Minerals managing director and chief executive officer George Bauk.
“With Browns Range now in the commissioning phase and commencing the production of mixed rare earth carbonates, we are investigating ways of enhancing the project to deliver better outcomes for our shareholders.”
The Browns Range pilot plant project is in the East Kimberley region of WA and is the first rare earth-focused plant to operate outside of China. The plant, which is focused on dysprosium and terbium, achieved a milestone last week with the production of its first carbonate.
It has a JORC 2012 total mineral resource of 9.07Mt at 0.63 per cent total rare earth oxides (TREO) for 57.3m kg of contained TREO.