Northern Minerals secures additional funding

THE BOURSE WHISPERER: Northern Minerals (ASX: NTU) has secured a further $4 million in interim funding.

The investment has come from Australian Conglin International Investment Group (ACIIG), which is an entity controlled by the company’s major shareholder Mr Yue.

The funds will allow a work program currently underway at the company’s Browns Range Heavy Rare Earth project to continue uninterrupted.

 

Source: Company announcement

A 20,000 metre drill program is being carried out at Browns Range targeting the expansion of the current JORC-compliant resource at the Wolverine deposit, and new resources at Gambit West and Area 5.

Northern Minerals said it expects results of the program in October 2013.

Other activities are also underway as part of the Browns Range Scoping Study, including work on environmental and native title approvals, process flow sheet optimisation, and project design.

This loan is in addition to the non-recourse interest free $4 million loan provided by ACIIG to Northern Minerals in April and is repayable on 20 December 2013.

“The additional interim funding is required due to Northern Minerals decision to extend its fundraising timetable by seeking shareholder approval in regards to the current Rights Issue to raise approximately $26.5 million,” Northern Minerals said in its ASX announcement.

“A meeting of Northern Minerals shareholders will be held on 28 June 2013 to vote on the proposed underwriting of the rights issue by ACIIG.”

The company said the funding ensured the work program would remain on schedule, and reinforced ACIIG’s commitment to fast-tracking the Browns Range project toward production.

Funds from the additional loan from ACIIG are scheduled to be provided to Northern Minerals by 25 June 2013.

The loan does not accrue any interest, unless the resolution in relation to the rights issue underwriting is not passed at the General Meeting on 28 June 2013.

If the resolution is not passed, interest will accrue from the date of the General Meeting at a rate of 5 per cent per annum.

The loan will be secured against the assets of the company excluding all Joint Venture tenements.