Northern Minerals brings in Chinese investor

Northern Minerals has attracted a Chinese-based funding partner to provide up to $49.5 million for its flagship Browns Range heavy rare earths project near Halls Creek.

The memorandum of understanding was signed with Jien Mining, an Australian subsidiary of Chinese mining and investment firm Jilin Jien Nickel Industry.

Under the terms of the deal, Jien Mining will provide an initial $5 million convertible note facility in exchange for 25 million Northern Minerals shares valued at 20 cents per share.

Following completion of due diligence on the deal, Northern Minerals will receive a further $17 million in exchange for 110 million shares (at the same issue price); with a further $27.5 million available if 110 million options are exercised, at 25 cents per share.

Following completion of the transaction, Jien Mining will become Northern Minerals’ largest shareholder, holding 33 per cent of the company’s issued capital.

Jien Mining will also be entitled to appoint two members to the company’s board.

Northern Minerals managing director George Bauk said the partnership reaffirmed the quality of the project and the strong market fundamentals its high-grade dysprosium product.

“The partnership will allow us to leverage Jien’s mining experience, financial strength and capital market networks to secure the final capital required to build the project, and progress the project into production,” Mr Bauk said.

Northern Minerals shares were 8.6 per cent higher at 25 cents per share at 10:30am.