Australian heavy rare earths producer Northern Minerals (ASX: NTU) has provided an update to investors about capital raising matters, future financing opportunities and other general matters.
As announced on 20 April 2020, the Company entered into a number of subscription agreements with sophisticated investors to raise A$22m at A$0.02. The Company also announced a Share Purchase Plan (SPP) priced at A$0.02. On 20 April 2020 the Company also announced the rejection by the Treasurer of the A$20m placement to Baogang as originally announced on 15 August 2019 at A$0.062.
A$22 Million Placement and Share Purchase Plan
The Company has entered into subscription agreements with various sophisticated investors to Raise A$22 million and announced a share purchase plan for all eligible shareholders (refer to ASX announcement 20 April 2020).
Company Debt Position as at 20 April 2020
As announced on 20 April 2020, the Company’s indicative debt position as at 20 April 2020 (excluding any accrued but unpaid interest and assuming the repayment (and redemption) of the A$7.5m Convertible Notes) is approximately A$24.3 million.
Potential Placement Facility
The Company has executed a term sheet with Lind Global Macro Fund, LP (Lind) in relation to a potential placement facility under which the placement of ordinary shares up to A$33.5 million over multiple tranches (during a 12 month term) may occur at variable issue prices calculated by reference to the Company’s volume weighted average share price.
It is intended that the facility is structured in an arrangement under which Lind would pre-pay for shares which would then be issued by the Company in shares or repaid in cash. The term sheet is non-binding in respect of the advancement of funds and the issue of shares and no formal agreements have been agreed between the parties at this stage. The Board will continue to work with Lind and an announcement will be made to ASX if a formal agreement is ultimately executed.
As announced on 3 March 2020, the Company continues to work with the Australian Taxation Office in relation to matters regarding its Research and Development (R&D) tax offset claims and the Company will inform the market as any material developments arise.
A$30 Million Placement (A$25.7m received in total and closed)
Further to the Company’s announcement on 14 January 2020, the Company confirms that the remaining subscription amounts of approximately A$4.3 million owing under the A$30 million placement (that was announced on 22 July 2019) have not been received by the Company by the extended completion date meaning that completion of that component of the placement has not occurred. Accordingly, the Company no longer has an agreement (or an obligation) to issue securities to those subscribers under the respective subscription agreements.
As announced on 3 March 2020, the Company may seek further funding in the form of debt (including traditional and convertible debt), equity (including private placements), royalty, or combinations of the three financing structures. The Company regularly has discussions with third parties in various jurisdictions about potential funding opportunities, and (in some cases) the Company also allows those parties to access due diligence materials and conduct site visits to facilitate potential investments in the Company.
Although these discussions take place regularly, such proposals will only be announced to the ASX once they are sufficiently advanced to warrant disclosure. As announced on 25 March 2020, the Company has received a letter of support from the Export Finance Australia advising the Company they are willing to continue to explore the potential provision of finance required for the Browns Range Processing Plant. On the same date as above, the Company mentioned that they continue to engage with the Critical Minerals Facilitation Office on the development of the plant/downstream capabilities and identify offtake and investor opportunities.