Australian heavy rare earths developer, Northern Minerals Limited (ASX: NTU) has received a further $3 million from Innovation Structured Finance Co., LLC, under its R&D Financing Facility as announced on 29 August 2017. Under the R&D Financing Facility, the Company has worked with its R&D advisor, Deloitte, to estimate the level of tax offsets for the FY18/19. The company has also made a further $2 million drawdown under the funding agreement with the Lind Partners.
Australian heavy rare earths producer Northern Minerals Limited (ASX: NTU) (the Company) is pleased to advise that it has received a further $3 million from Innovation Structured Finance Co., LLC, under its R&D Financing Facility as announced on 29 August 2017.
Under the R&D Financing Facility, the Company has worked with its R&D advisor, Deloitte, to estimate the level of tax offsets for the FY18/19. Innovation Structured Finance Co., LLC, a company associated with Brevet Capital Management (Brevet) provides funding equal to 75% of the estimated tax offset, with the principal and accrued interest repayable out of actual tax offsets received at the end of the financial year.
Under proposed changes to the R&D tax system by the Australian Government, the amount that the Company may be eligible to apply for in FY19 may be limited to $4 million. At present, these proposed changes have not been legislated by the Australian Parliament.
The Company is also pleased to announce that it has made a further drawdown of $2 million under the Funding Agreement entered into with an entity controlled by The Lind Partners (Lind), as announced on 14 June 2017.
This drawdown will be represented by the issue of 2 convertible securities each with a face value of $1.25 million and the face value of the convertible securities are repayable by the Company in accordance with the Funding Agreement (as summarised in the Company’s ASX announcement on 23 April 2018).
The term of each convertible security is 30 months. The net amount to be received by the Company from Lind in relation to the issue of the convertible securities and the $2 million drawdown is $1.95 million, after the deduction of commitment fees payable to Lind in relation to the drawdown that were offset against the funds advanced to the Company.
The Company and Lind have also agreed that the maximum number of shares that may be issued to Lind in relation to conversions of those convertible securities is 25 million shares, or such higher number as approved by shareholders in relation to those convertible securities.
The Company will use the funds advanced under the Funding Agreement to progress development of its Browns Range Heavy Rare Earth Pilot Plant Project, and for working capital purposes.
As part of the drawdown, the Company will, subject to shareholder approval, issue to Lind (or its nominee) 10 million unlisted options each exercisable at $0.125 per option with an expiry date of 36 months from the date the options are issued.
