Australian heavy rare earths producer Northern Minerals (ASX: NTU) has tapped one of its top shareholders for a $4 million capital raising. The company entered into a subscription agreement with JHY Investments for the issue of 4 million convertible notes with a face value of $1 each. The funds raised will be used for ongoing working capital needs.
Australian heavy rare earths producer Northern Minerals Limited (ASX: NTU) (the Company) is pleased to announce that it has entered into a subscription agreement with JHY Investments Pty Ltd (JHY), a top 5 shareholder of the Company, for the issue of 4,000,000 convertible notes over two tranches with a face value of A$1.00 per note.
Tranche 1 has been completed and 3,500,000 notes have been issued to JHY out of the Company’s existing placement capacity under Listing Rule 7.1. A total of A$3,500,000 (before costs) has been received by the Company for that subscription.
Tranche 2 relates to the issue of a further 500,000 notes and is due to complete on 31 January 2019 (or such earlier date as agreed by JHY). The issue of notes under Tranche 2 will raise a further A$500,000 for the Company (before costs) and will also be issued out of the Company’s existing placement capacity under the Listing Rules.
Funds raised from the issue of the notes will be utilised for ongoing working capital.
The Notes are unsecured against the assets of the Company however, Huatai Mining Pty Ltd has granted JHY security over 50,000,000 of its own shares in the Company securing the obligations of the Company under the subscription agreement.
As part of the subscription, the Company has also granted JHY 10,000,000 unlisted options for a nil issue price, exercisable at $0.09 per share with an expiry date of 31 December 2019.
The announcement dated 15 October 2018 and follow up announcement on 1 November 2018 and 15 November 2018 in relation to “$27 Million Funding Package” with NRE Industrial Group has been further delayed. NRE has informed the company that some funds could be received in the coming week.