THE BOURSE WHISPERER: Northern Minerals (ASX: NTU) has raised $5 million through a share placement.
The company said it intends using the finds to develop its Browns Range Heavy Rare Earth (HRE) project in northern Australia.
Northern Minerals indicated it is currently working towards the announcement of a maiden JORC resource at the Wolverine prospect next month.
Northern Minerals project location map. Source: Company announcement
“We are very pleased to see the placement well supported, and look forward to the next phase of development for our HRE assets,” Northern Minerals managing director George Bauk said in the company’s announcement to the Australian Securities Exchange.
“We are on track to deliver a maiden JORC resource at Wolverine by the end of this year, which will be a great outcome given we have moved from first drill hole to resource status in 17 months.
“The additional funds will be used to finalise the JORC resource and develop our scoping studies for the Wolverine prospect, as well as the ongoing exploration and development of our other exciting HRE prospects across the Browns Range project.”
Northern Minerals said it was also continuing to advance its metallurgical test work and strategic off-take discussions as part of its pathway to production.
“In addition, the Board and management remain focussed on developing longer term capital management strategies to take Browns Range into production,” Bauk said.
The placement includes 25 million fully paid ordinary shares at an issue price of 20 cents per share to domestic and international professional and sophisticated investors, raising a total of $5 million before costs.
The Placement received strong supported from Northern Minerals’ major shareholder Conglin Yue, who will ultimately increase his shareholding to 19.9 per cent by subscribing for an additional 15 million shares in the Placement, worth $3 million.
The placement Yue includes two payment tranches, with an initial placement of 5 million shares and payment of $1 million on 19 November 2012, and a second deferred placement of 10 million shares and payment of $2 million on 10 January 2013.
Northern Minerals will have immediate access to total funds of $3 million upon completion of settlement of the first tranche on 19 November, 2012.