Australian heavy rare earths producer Northern Minerals (ASX: NTU) has provided an update regarding a subscription agreement entered into with Baogang Group Investment to raise $20 million (before costs) under a private placement.
Shareholders approved the issue of shares under the Placement at the Company’s 2019 Annual General Meeting which was held on 13 November 2019.
The Company is now pleased to report that BGIA has informed the Company that approval from the State-owned Assets Supervision and Administration Department of the Chinese Government has been obtained and that remaining Chinese regulatory approvals required for the Placement are progressing.
Completion of the Placement is also subject to the receipt of a no objections letter by BGIA from the Treasurer of the Commonwealth of Australia under Australia’s foreign investment laws confirming that the Treasurer has no objections to the transaction.
BGIA has informed the Company that it has agreed with the Australian Foreign Investment Review Board (FIRB) to voluntarily extend the statutory deadline for the Treasurer to make a final decision in relation to the transaction to 27 February 2020.
As a result, the Company has agreed to extend the condition precedent satisfaction deadline by 2 months to 8 months after the date of the subscription agreement (that is, from 15 February 2020 to 15 April 2020) to factor in the new FIRB decision deadline, the anticipated timing of remaining Chinese governments approvals and delays that may be faced in China as a result of the corona virus outbreak.
Accordingly, the Company will seek an ASX waiver under Listing Rule 14.7 to extend the 3 month deadline by which it was required to issue the shares to BGIA under the Placement pursuant to the Shareholder Approval.
The Company will continue to keep the market informed as it receives further information from BGIA in relation to the status of the FIRB Condition and remaining Chinese Government approvals.