Northern Minerals (ASX: NTU) reported its June quarter activities, highlighted by the decision to proceed with the Browns Range Pilot Plant Project. Following approval, siteworks commenced during the quarter, including commencement of mining, bulk earthworks site clearing and upgrade of the camp. Mining will continue this quarter, while the first modules of the plant will commence construction in China.
The focus this quarter has been commencement of works for the $56 million Browns Range pilot plant project, which was approved by the Board during the quarter
- Final Investment Decision given for the three-year Pilot Plant project at Browns Range.
- Sinosteel Equipment & Engineering Co., Ltd (Sinosteel MECC) has commenced construction of the modular process components in the Republic of China.
- ASX-listed MACA Limited was appointed as mining and bulk earthworks contractor for Browns Range. During the quarter, MACA mobilised to site and commenced works.
- Sinosteel MECC has executed a Letter of Intent (LoI) with WA-based mining and civil contractor, Primero Group Pty Ltd (Primero), covering civils, installation, testing and commissioning of the Browns Range Pilot Plant.
- The Lind Partners, through The Australian Special Opportunity Fund, LP, has agreed to provide funding of up to A$14 million in Convertible Securities for the Browns Range Pilot Plant Project. The term of facility over 30 months aligns with Pilot Plant timetable
Browns Range Project Update
Northern Minerals has commenced works at the Pilot Plant Project for its 100% owned, dysprosium-rich Browns Range heavy rare earth element project, located 160km south east of Halls Creek in the Tanami region of Western Australia and the Northern Territory. The three-year pilot plant development, was approved by the Board in April 2017.
The Company has the opportunity to become the first significant dysprosium producer outside of China through the development of the high-grade Browns Range Project, placing Northern Minerals in a unique position to capitalise on the growing demand for the rare earth element in the production of neodymium iron-boron magnets commonly used in the production of motors for burgeoning electric vehicles sector, where industry commentators now agree demand Hs reached an inflection point.
During the June quarter the mining and bulk earthworks contract was issued to ASX-listed MACA Limited. Following this MACA mobilised equipment and personnel to site and has commenced works for the Pilot Plant. It is anticipated that the mining component of the project will be completed in H2.
Sinosteel MECC issued a Letter of Intent (LoI) with WA-based Primero Group Limited for the civils component of the project. The scope of works includes the civils, installation, testing and commissioning of the Browns Range Pilot Plant Project. Primero Group is a multi-disciplinary turnkey company specialising in the design, construction and commissioning of projects. With regards to technology minerals, Primero has delivered lithium, vanadium and tantalum projects throughout regional Western Australia.
During the quarter, the Company executed a Private Placement Term Sheet with The Australian Special Opportunity Fund, LP, (the Investor) for a funding agreement of up to A$14 million. The funding will be provided as second ranking secured Convertible Securities with a 30 month term and 0% interest rate. The funding agreement allows for two $6 million tranches and two $1 million tranches based on specific events. The funding agreement includes provisions for the conversion into Ordinary shares or early repayment as is typical in an agreement of this nature. As a facilitation fee, the Company has agreed to issue the Investor 22.5 million Options with a term of 36 months and an exercise price of $0.25.
The Pilot Plant Project will be used to undertake research and development and to assess the economic feasibility of a full-scale project and forms part of a broader ongoing feasibility study underpinning the Browns Range Project.