The Australian Mining Review - - NEWS - RAY CHAN

North­ern Min­er­als is seek­ing al­ter­nate fund­ing af­ter the Aus­tralian Gov­ern­ment pro­hib­ited a $20m share place­ment to China’s Bao­gang Group In­vest­ments, which would have given the en­tity a 13pc share in the miner.

The agree­ment would have re­sulted in North­ern Min­er­als is­su­ing Bao­gang more than 322.5m shares.

The Aus­tralian com­pany has now en­tered into a num­ber of sub­scrip­tion agree­ments with “so­phis­ti­cated in­vestors” to raise $22m at 2c per share.

The new share place­ment would be un­der­taken over four tranches, with the first rais­ing $9m, the sec­ond $4.2m, the third $3.4m and the fourth $5.4m.

The first tranche place­ment, con­sist­ing of 450m shares, would be done un­der the com­pany’s ex­ist­ing place­ment ca­pac­ity, while the re­main­ing tranches will be sub­ject to share­holder ap­proval.

Bao­gang is a sub­sidiary of a Chi­nese state-owned cor­po­ra­tion with oper­a­tions in­clud­ing the vast Bao­tou rare earth mine based in In­ner Mon­go­lia, China’s largest rare earth pro­ducer.

An­a­lysts be­lieve the Fed­eral Gov­ern­ment move sig­nals that Aus­tralia is se­ri­ous about its in­ten­tion to work closely with the US to help Wash­ing­ton source new sup­plies of crit­i­cal met­als and re­duce Amer­i­can de­pen­dence on China.

The US mil­i­tary re­cently granted funds to Aus­tralian com­pany Lynas Cor­po­ra­tion to build a rare earths fa­cil­ity (see sep­a­rate story).

North­ern Min­er­als op­er­ates the Browns Range mine lo­cated near Halls Creek in the east Kim­ber­ley.

The project has a pilot plant, cur­rently on care and main­te­nance due to COVID-19, that has been separat­ing rare earths and pro­duced small quan­ti­ties of dys­pro­sium, which is es­sen­tial for mag­nets used in elec­tric ve­hi­cles.

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