Australian heavy rare earths developer Northern Minerals Limited (ASX: NTU) has launched a two-tranche placement to institutional and sophisticated investors of new fully paid ordinary shares to raise $43 million and a $5 million share purchase plan.
Northern Minerals expects to raise gross proceeds of approximately $48 million, with new shares to be issued at a price of $0.019 each. The level of demand for the placement significantly exceeded $43 million. The company is appreciative of the support from existing and new shareholders.
Highlights
- Binding commitments received from existing and new institutional and sophisticated investors to raise $43m (before costs) via a two-tranche placement
- Significant level of demand for the placement received
- The company will also offer a $5m SPP (before costs), which will provide all eligible shareholders the opportunity to participate in the transaction
- Placement and SPP issue price of $0.019 per share, representing a discount of 20.8% to the last closing share price and a discount of 22.4% to the five-day VWAP
- Proceeds from the placement and SPP, together with existing cash, will support current operations, advance the company’s funding initiatives and be used to progress the Browns Range heavy rare earth project towards production including finalisation of the DFS, exploration drilling activities to increase the project’s resource base and early works
- Following the completion of the equity raising, the company will be funded through to completion of the DFS and progress towards a subsequent Final Investment Decision, targeted to occur in 1H CY2025.
Commenting on the placement, Northern Minerals executive chair Adam Handley said:
“We are pleased with the strong support from existing and new investors, which reflects a clear vote of confidence in the Browns Range project. We look forward to executing on our strategy and delivering on our commitment to becoming a globally significant supplier of dysprosium and terbium – critical elements essential to driving the global clean energy transition.”
Northern Minerals managing director Shane Hartwig added:
“The placement enables Northern Minerals to continue key project initiatives, seek project funding and proceed towards a Final Investment Decision while also enabling the company to undertake value-accretive exploration initiatives. Our team is working to complete the DFS (Q1 2025) to put the company in a position where we can consider a positive FID for the development of the project.
“The release of the company’s updated Mineral Resource estimate (Q4 2024) will be a key milestone to enable the DFS to be completed. Although our target FID date has moved, the team is using this time to complete additional key technical work programs that will assist in ongoing technical due diligence reviews of the project, important in ensuring the production of a DFS focusing on long-term, sustainable value for shareholders.”
Petra Capital and Argonaut Securities acted as joint lead managers and joint bookrunners to the placement, which was not underwritten. Allens acted as legal adviser to the company.
