Australian heavy rare earths producer Northern Minerals (ASX: NTU) has updated the market in relation to the Company’s $30 million placement (originally announced on 22 July 2019), the placement to Baogang Group Investment (Australia) Pty Ltd (BGIA) announced on 15 August 2019 and the JHY Investments Pty Ltd (JHY) convertible note announced on 17 December 2018 and 17 January 2019.
$30m Placement update
Further to recent updates in relation to the $30m Placement, the Company has received an additional $1,600,000 in subscription funds. Accordingly, the Company has issued 25,806,451 fully paid ordinary shares to the relevant subscribers, all of which have been issued with shareholder approval for the purposes of Listing Rule 7.1 (obtained at the Company’s AGM on 13 November 2019).
The total amount raised to date under the $30m Placement is approximately $24.7 million (before costs). The balance of approximately $5.3 million in subscription funds was not received by the due date of 30 November 2019 and the Company is working with the relevant subscribers and their representatives to progress completion of the remaining components of the $30m Placement by 31 December 2019.
Baogang Placement update
The company refers to the announcement on 15 August 2019 that the Baogang Placement is subject to FIRB Approval and all regulatory approvals in the People’s Republic of China being obtained. BGIA has confirmed that it will be lodging an application with the Australian Foreign Investment Review Board (FIRB) in relation to the Baogang Placement later this week.
The Baogang Placement was also subject to approval of the Company’s shareholders which was obtained at the Company’s AGM on 13 November 2019.
Amendment to JHY convertible note terms
The Company refers to its announcements on 17 December 2018 and 17 January 2019 detailing the $4 million convertible note subscription and option agreement entered into with JHY.
The terms of the convertible notes issued to JHY (Notes) provided that the Notes would mature on 31 December 2019 and that an interest rate of 16% per annum would be payable on the Notes. The Company has successfully negotiated an extension of the maturity date for the Notes for a further year and also a lower interest rate.
The maturity date for the Notes is now 31 December 2020 and the interest rate payable on the Notes will be reduced to 10% per annum on and from 1 January 2020.
The Company’s shareholders ratified the issue of the Notes at the General Meeting held on 26 February 2019. As consideration for agreeing to amend the terms of the Notes, the Company has issued 2 million fully paid ordinary shares in the capital of the Company to JHY out of the Company’s placement capacity under Listing Rule 7.1. The Company may seek to ratify this issue at its next general meeting.
Exercise of performance rights
A total of 206,050 fully paid ordinary shares have been issued as a result of the exercise of performance rights which vested when performance conditions relating to key performance indicators regarding occupational health and safety, production levels and quality of product produced and shipped from the Browns Range Pilot Plant were satisfied.
These shares were issued under Listing Rule 7.2, exception 9 and the issue is not conditional on receipt of shareholder approval.