Northern Minerals (ASX: NTU) has tapped investor Liu Xiaohua for a $3 million capital raising, to be done through the placement of 60 million shares at 5 cents each. The proceeds from the raising will be used for ongoing working capital needs, while the subscriber may choose to nominate a non-executive director to the company’s board.
Australian heavy rare earths producer Northern Minerals Limited (ASX: NTU) has entered into a subscription agreement with Liu Xiaohua for the placement of 60,000,000 fully paid ordinary shares in the Company at an issue price of A$0.05 per share to raise A$3 million (before costs).
Subscription funds are to be received by the Company in the following tranches:
1) $1 million was transferred on 1 March 2019 and due to be in NTU bank account 4 March 2019, and the shares will be issued to Liu Xiaohua out of the shareholder approval from the General Meeting held on 26 February in resolution 11.
2) $2 million on or before 15 March 2019 and the shares will be issued to Liu Xiaohua out of the shareholder approval from the General Meeting held on 26 February in resolution 11.
Funds raised from the issue of the shares will be utilised for ongoing working capital purposes.
As part of the subscription agreement, the subscriber may elect to nominate to the Board of NTU a non-executive Director following the completion of Tranche 2.
The Company has also extended the consultancy agreement with Go & Company Ltd under which Go & Company Ltd will advise the Company on future equity raisings. The Company will issue 20,000,000 fully paid ordinary shares to Go & Company Ltd as partial consideration for the extension of the consultancy agreement once the $3 million placement described above has been completed.
The Company will not raise any funds through this issue of shares and the shares will be issued out of the Company’s existing placement capacity under Listing Rule 7.1. Shareholder approval will not be required for this issue of shares however, the Company may seek to ratify the issue at future general meetings.
