Australian heavy rare earths producerNorthern Minerals (ASX: NTU) has entered into a subscription agreement with Baogang Group Investment (Australia) Pty Ltd (BGIA) to raise $20 million under a private placement.
BGIA is a wholly-owned subsidiary of a Chinese State Owned Entity that owns steel mills in China.
The Placement is for the issue of a total of 322,580,645 fully paid ordinary shares (Shares) at an issue price of A$0.062 per share to raise $20 million (before costs) and is subject to approval of the Company’s shareholders, BGIA obtaining Australian Foreign Investment Review Board (FIRB) approval and all regulatory approvals in the People’s Republic of China being obtained.
All conditions to the Placement must be satisfied within 6 months (or such longer period as agreed) in order for the Placement to complete. Funds from the Placement are due to be received within 60 days following satisfaction (or waiver) of the above conditions.
The shares to be issued under the Placement represent approximately 13.0% of the Company’s existing share capital.
The Company intends to use the funds raised under the Placement towards progression of the Company’s project enhancement initiatives for the Browns Range Project that have been previously announced to ASX (being ore sorting, product separation and increased exploration).
The Company will seek shareholder approval for the Placement at its Annual General Meeting (which will be held in November).
